Standing Committee B

[Mr. James Cran in the Chair]

Pensions Bill

New Clause 44 - Financial support directions

'(1) This section applies in relation to an occupational pension scheme other than— 
 (a) a money purchase scheme, or 
 (b) a prescribed scheme or a scheme of a prescribed description. 
 (2) The Regulator may issue a financial support direction under this section in relation to such a scheme if the Regulator is of the opinion that the employer in relation to the scheme— 
 (a) is a service company, or 
 (b) is insufficiently resourced, 
 at a time determined by the Regulator which falls within subsection (7) (''the relevant time''). 
 (3) A financial support direction in relation to a scheme is a direction which requires the person or persons to whom it is issued to secure— 
 (a) that financial support for the scheme is put in place within the period specified in the direction, 
 (b) that thereafter that financial support or other financial support remains in place while the scheme is in existence, and 
 (c) that the Regulator is notified in writing of prescribed events in respect of the financial support as soon as reasonably practicable after the event occurs. 
 (4) A financial support direction in relation to a scheme may be issued to such one or more of the persons falling within subsection (5) as the Regulator considers appropriate. 
 (5) A person falls within this subsection if the person— 
 (a) is the employer in relation to the scheme at the relevant time, or 
 (b) is, at the relevant time, connected with or an associate of the employer. 
 (6) A financial support direction must identify all the persons to whom the direction is issued. 
 (7) A time falls within this subsection if it is a time which falls within a prescribed period which ends with the determination by the Regulator to exercise the power to issue the financial support direction in question. 
 (8) For the purposes of subsection (3), a scheme is in existence until it is wound up. 
 (9) No duty to which a person is subject is to be regarded as contravened merely because of any information or opinion contained in a notice given by virtue of subsection (3)(c). 
 This is subject to section 234 (protected items).'.—[Malcolm Wicks.] 
 Brought up, and read the First time. 
 Question proposed [this day], That the clause be read a Second time. 
 Question again proposed.

James Cran: I remind the Committee that with this it will be convenient to discuss the following:
 Government new clause 45—Meaning of ''service company'' and ''insufficiently resourced''. 
 Government new clause 46—Meaning of ''financial support''. 
 Government new clause 47—Contribution notices where non-compliance with financial support direction. 
 Government new clause 48—The sum specified in a section [Contribution notices where non-compliance with financial support direction] contribution notice. 
 Government new clause 49—Content and effect of a section [Contribution notices where non-compliance with financial support direction] contribution notice. 
 Government new clause 50—Section [Contribution notices where non-compliance with financial support direction] contribution notice: relationship with employer debt. 
 Government new clause 51—Sections [Financial support directions] to [Section [Contribution notices where non-compliance with financial support direction]: relationship with employer debt]: interpretation.

Nigel Waterson: Welcome back to our deliberations, Mr. Cran.
 I was making the point that in this tranche of new clauses dealing with moral hazard the regulator has the power to issue a notice for financial support where there is a service company—I imagine that that is straightforward to define—or, more worryingly, where a scheme is insufficiently resourced. I was following the trail through the new clauses to find out how that was defined. 
 In subsection (3) of new clause 45 there are two requirements. The first is that a prescribed percentage of the section 75 debt is unable to be met. Our old friend, the word ''prescribed,'' has come up yet again, and I asked the Minister to give us just a glimpse of his thinking on what will be included in subsequent regulations. The second requirement is that there is at the relevant time a person who is connected with, or an associate of, the employer and who has sufficient net assets to meet that percentage of the debt. In new subsection (4), there is the promise of further regulations for determining, calculating and verifying a person's net assets. Not for the first time we are noticing that there will be a few gaps in the Bill if the Government have their way. We, and those in the outside world who take an interest in our deliberations, deserve a fuller explanation of how these rather important matters in the context of moral hazard will be approached. 
 New clause 45 contains a definition of a service company, which is reasonably straightforward. A company's turnover is 
''solely or principally derived from amounts charged for the provision of the services of employees . . . to other companies . . . of the same group'' 
In much of the British economy these days, the pattern is to have ''shell'' companies with a lot of outsourcing, subcontracting and so on, for all the best and most legitimate reasons. Again I press the Minister on whether he is confident that his definition in new clause 45 of a service company will meet all requirements. The explanatory notes to the new clauses say that
''the test is designed to ensure the responsibility to meet the pension liabilities does not rest with the weakest company in what may otherwise be a financially healthy group.'' 
That means that judgments will have to be made, presumably by the regulator's staff, about what is a weak company and what is a financially healthy group. 
 New clause 46 sets out the meaning of financial support. It says an arrangement can be applied jointly and severally for pension liabilities, and it sets out other requirements. Having referred to bank guarantees and other methods, at the end it rather delphically refers to 
''such other arrangements as may be prescribed.'' 
It would be interesting to know whether that was just the draftsman covering himself, or whether the Government have in mind some specific circumstances that might apply. 
 The last thing in the explanatory notes is the promise of yet more Government amendments on Report. Unless the Minister says to the contrary, I assume that those amendments will be entirely consequential in drafting, and that the real meat of the proposals is contained in new clauses 44 to 51.

Steve Webb: I have just a brief postscript to make. This morning, we dealt with one set of amendments that tried to tackle the moral hazard problem. Although this set of new clauses are described in the briefing notes that we were given by the Department as ''moral hazard clauses,'' they are a different animal in the sense that they do not relate to where people have deliberately arranged their affairs to put an extra burden on the PPF. They can be applied to circumstances where the arrangements that people have made could put a burden on the PPF. I do not understand why that is a moral hazard. The Minister said clearly that the provisions relate to cases in which people may have done something perfectly legitimate and that the Government are giving the regulator the power to tell them to reorder their affairs to prevent a future liability on the pension protection fund. If that is the context, I am slightly puzzled, and I wonder whether the Minister could clarify the issue.
 The Minister suggested that using the power implied nothing immoral about the company or the arrangement that it had set up—that it was, for example, artificial. He said that it might have set itself up in a perfectly legitimate way and that the side effects would not have mattered before we had the PPF, but now that we did, there could be problems, and the Government wanted powers to make people change their behaviour. That is not a moral hazard in my book, but I may have misunderstood the point. 
 This morning, we asked the Minister to explain what the Government meant when they said that the regulator had warned that schemes were already starting to alter their structures and conduct so that they could put a burden on the PPF. We asked him for details, but—undoubtedly by accident—he did not give us any. What we were interested in—this also relates to the provisions before us—is evidence from the regulator that schemes are reordering their affairs 
 to take advantage of the PPF and that service companies are becoming more of an issue. That might be a kind of moral hazard, but that was not where the Minister was coming from. The key question, however, is what the Government mean when they say that the regulator has already started to give warnings. What is the scale of the problem? How big is the moral hazard that we already face? I am sure that it was only by accident that the Minister did not answer the question.

Malcolm Wicks: Welcome to our deliberations, Mr. Cran. We may well spend all of Thursday on the matters before us, but it is just possible that we will conclude today.
 As the hon. Member for Northavon (Mr. Webb) reminded us, this group of new clauses deals with a different situation from the earlier group, which related to arrangements that are deliberately set up to avoid responsibilities. Here, we are dealing with company structures that have been set up for perfectly legitimate reasons. However, I shall try to deal with the hon. Gentleman's point at the end of my remarks. 
 First, let me deal with some of the specifics raised by the shadow Minister, the hon. Member for Eastbourne (Mr. Waterson). The power to require financial support to be put in place should not impose a heavy burden on responsible employers who, as a result of perfectly legitimate business transactions, find themselves with a comparatively weak all-service company as the sole sponsoring employer of the pension scheme. 
 There is a range of reasonable and flexible financial support arrangements that the group can put in place to comply with the direction. In addition to the arrangements listed, companies will always have the option of moving the liabilities out of the weak company into a stronger one, or strengthening the company itself before the direction, of which it will be warned in advance, is issued. 
 Enforcement action will therefore be taken only against employers who have deliberately manipulated company structures to rid themselves of pension liabilities, or who refuse to provide adequate safeguards for their employees' pensions. Responsible employers who happen to have their pension liabilities sitting in service companies could, however, start taking steps now to ensure that their employees are protected and to avoid any question of the power applying to them. 
 The powers have been approved by the Department of Trade and Industry, which agrees that they should have no effect on legitimate business transactions or company restructurings. The drafting of the provisions is designed specifically to catch only those who deliberately manipulate their affairs to take advantage of the PPF entry rules. 
 I was asked about the definition of ''insufficiently resourced''. It has two elements: first, that the employer itself is weak and, secondly, that another connected person, such as another company in the group, is stronger. Both elements are measured by reference to a notional section 75 debt, which might be payable if the scheme wound up. An employer is 
 insufficiently resourced if it could not pay even a proportion of that notional debt, but another connected party could. The aim of the test is to identify where the employer is disproportionately weak compared with other connected parties. 
 I was asked about the calculations that hinge on the definition of ''relevant time''. The relevant time is intended to be as close as possible to the time of the determination to issue a direction. Because of the need to carry out calculations and to gather financial information, it will not be possible for the relevant time to occur on the same day as the decision to issue the direction, so the regulator is given the flexibility to allow sufficient time to carry out the calculations. 
 I was asked about the meaning of ''prescribed'' in connection with the percentage for insufficient assets. It means prescribed by regulation. We will consult on the appropriate percentage. The purpose of the percentage is to provide for a comparison between the weak company and the other, stronger members of the group. 
 The definition of net assets will be based on the definition in section 264 of the Companies Act 1985. However, that definition allows companies to hold certain assets, such as property, at artificially low values by not requiring the valuation to be updated if its value has risen. The definition will be adjusted accordingly, to ensure that it produces a current figure. 
 In general, the intention is to give employers as much flexibility as possible in the arrangements that can be adopted. The list represents all the arrangements currently identified as providing an appropriate degree of protection. However, if other appropriate arrangements are identified, the power allows the list to be extended in order to give employers more options. Employers will be able to apply to the regulator under clause 75 if they wish to switch to the new arrangements. As well as the arrangements listed, companies will always have the option to move the liabilities out of the weak company to a stronger one, or to strengthen the company itself before the direction, of which it will be warned, is issued. 
 The hon. Member for Eastbourne asked about shell companies. One reason for covering companies that are insufficiently resourced is that covering only service companies would not be a wide enough provision to cover shell companies such as those mentioned by the hon. Gentleman. 
 The hon. Member for Northavon was puzzled, quite reasonably, by the fact that, if company structures are set up for perfectly proper reasons, we should have included them in clauses dealing with moral hazard. There are two possibilities. If it is a relatively complicated company structure—a parent company, a service company or whatever—issues could arise about the scheme's funding. It could go into the PPF. However, the powers that we have included could enable the parent company or other companies to move assets to save the situation. It is not necessarily that the parent company or anyone else was thinking of doing any wrong, but pension liabilities would nevertheless not have been met. 
 A tougher situation would arise if the company structure could be used or abused by a parent company that realised that its current structure enabled it to not take on pension responsibilities, even though the company structure was originally designed for perfectly reasonable company purposes. That is probably where the moral hazard arises. 
 I was asked about current cases. I am sorry not to have answered earlier, but I was not aware of the data—much of it seemed to be a series of rumours or anecdotes, and a developing atmosphere. However, the Occupational Pensions Regulatory Authority has advised us that it believes that some companies are restructuring to avoid their pension liabilities, and it believes that they want to pass them instead to the new pension protection fund. However, OPRA does not currently have powers to deal with those situations, and cannot request the appropriate information about the employer. We are therefore unable to give figures. OPRA is monitoring the cases that it knows of, and is working closely with the Department and trustees to protect members affected. It is a case of our hearing mood music that we do not like the sound of; that is why we need to take on the powers given in the provisions. 
 Question put and agreed to. 
 Clause read a Second time, and added to the Bill.

New Clause 45 - Meaning of ''service company'' and ''insufficiently resourced''

'(1) This section applies for the purposes of section [Financial support directions] (financial support directions). 
 (2) A company (''C'') is a ''service company'' at the relevant time if C's turnover, as shown in the latest available accounts for C prepared in accordance with section 226 of the Companies Act 1985 (c. 6), is solely or principally derived from amounts charged for the provision of the services of employees of C to other companies who are members of the same group of companies as C. 
 (3) The employer in relation to a scheme is insufficiently resourced at the relevant time if— 
 (a) at that time the employer has insufficient net assets to enable it to meet a prescribed percentage of the estimated section 75 debt in relation to the scheme, and 
 (b) there is at that time a person who is connected with, or an associate of, the employer and who has sufficient net assets to meet that percentage of that debt. 
 (4) For the purposes of subsection (3) a person's net assets are to be determined, calculated and verified in a prescribed manner. 
 (5) In this section the ''estimated section 75 debt'', in relation to a scheme, means the amount which the Regulator estimates to be the amount of the debt which would become due from the employer to the trustees or managers of the scheme under section 75 of the Pensions Act 1995 (c. 26) (deficiencies in the scheme assets) if— 
 (a) subsection (2) of that section applied, and 
 (b) the time designated by the trustees or managers of the scheme for the purposes of that subsection were the relevant time. 
 (6) When calculating the estimated section 75 debt in relation to a scheme under subsection (5), the amount of any debt due at the relevant time from the employer under section 75 of the Pensions Act 1995 (c. 26) is to be disregarded.
 (7) In this section ''the relevant time'' has the same meaning as in section [Financial support directions].'.—[Malcolm Wicks.] 
 Brought up, read the First and Second time, and added to the Bill.

New Clause 46 - Meaning of ''financial support''

'(1) For the purposes of section [Financial support directions] (financial support directions), ''financial support'' for a scheme means one or more of the arrangements falling within subsection (2) the details of which are approved in a notice issued by the Regulator. 
 (2) The arrangements falling within this subsection are— 
 (a) an arrangement whereby, at any time when the employer is a member of a group of companies, all the companies who are members of the group are jointly and severally liable for the employer's pension liabilities in relation to the scheme; 
 (b) an arrangement whereby, at any time when the employer is a member of a group of companies, a company which meets prescribed requirements and is the holding company of the group is liable for the employer's pension liabilities in relation to the scheme; 
 (c) an arrangement which meets prescribed requirements and whereby additional financial resources are provided to the scheme; 
 (d) such other arrangements as may be prescribed. 
 (3) In subsection (2), ''the employer's pension liabilities'' in relation to a scheme means— 
 (a) the liabilities for any amounts payable by or on behalf of the employer towards the scheme (whether on his own account or otherwise) in accordance with a schedule of contributions under section 184, and 
 (b) the liabilities for any debt which is or may become due to the trustees or managers of the scheme from the employer whether by virtue of section 75 of the Pensions Act 1995 (c. 26) (deficiencies in the scheme assets) or otherwise.'.—[Malcolm Wicks.] 
 Brought up, read the First and Second time, and added to the Bill.

New Clause 47 - Contribution notices where non-compliance with financial support direction

'(1) This section applies where there is non-compliance with a financial support direction issued in relation to a scheme under section [Financial support directions]. 
 (2) The Regulator may issue a notice to any one or more of the persons to whom the direction was issued stating that the person is under a liability to pay to the trustees or managers of the scheme the sum specified in the notice (a ''contribution notice''). 
 (3) The Regulator may issue a contribution notice to a person only if the Regulator is of the opinion that it is reasonable to impose liability on the person to pay the sum specified in the notice. 
 (4) The Regulator, when deciding for the purposes of subsection (3) whether it is reasonable to impose liability on a particular person to pay the sum specified in the notice, must have regard to such matters as the Regulator considers relevant including, where relevant, the following matters— 
 (a) whether the person has taken reasonable steps to secure compliance with the financial support direction, 
 (b) the relationship which the person has or has had with the employer (including, where the employer is a company, whether the person has or has had control of the employer),
 (c) the relationship which the person has or has had with the parties to any arrangements put in place in accordance with the direction (including, where any of those parties is a company, whether the person has or has had control of that company), 
 (d) any connection or involvement which the person has or has had with the scheme, 
 (e) the financial circumstances of the person, and 
 (f) such other matters as may be prescribed. 
 (5) Subsection (10) of section 435 of the Insolvency Act 1986 (c. 45) (meaning of control) applies for the purposes of subsection (4) as it applies for the purposes of that section. 
 (6) A contribution notice may not be issued under this section in respect of non-compliance with a financial support direction in relation to a scheme where the Board of the Pension Protection Fund has assumed responsibility for the scheme under Chapter 3 of Part 2 (pension protection).'.—[Malcolm Wicks.] 
 Brought up, read the First and Second time, and added to the Bill.

New Clause 48 - The sum specified in a section [Contribution notices where non-compliance with financial support direction] contribution notice

'(1) The sum specified by the Regulator in a contribution notice under section [Contribution notices where non-compliance with financial support direction] may be either the whole or a specified part of the shortfall sum in relation to the scheme. 
 (2) The shortfall sum in relation to a scheme is— 
 (a) in a case where, at the time of non-compliance, a debt was due from the employer to the trustees or managers of the scheme under section 75 of the Pensions Act 1995 (c. 26) (''the 1995 Act'') (deficiencies in the scheme assets), the amount which the Regulator estimates to be the amount of that debt at that time, and 
 (b) in a case where, at the time of non-compliance, no such debt was due, the amount which the Regulator estimates to be the amount of the debt under section 75 of the 1995 Act which would become due if— 
 (i) subsection (2) of that section applied, and 
 (ii) the time designated by the trustees or managers of the scheme for the purposes of that subsection were the time of non-compliance. 
 (3) For the purposes of this section ''the time of non-compliance'' means— 
 (a) in the case of non-compliance with paragraph (a) of subsection (3) of section [Financial support directions] (financial support directions), the time immediately after the expiry of the period specified in the financial support direction for putting in place the financial support, 
 (b) in the case of non-compliance with paragraph (b) of that subsection, the time when financial support for the scheme ceased to be in place, 
 (c) in the case of non-compliance with paragraph (c) of that subsection, the time when the prescribed event occurred in relation to which there was the failure to notify the Regulator, or 
 (d) where more than one of paragraphs (a) to (c) above apply, whichever of the times specified in the applicable paragraphs the Regulator determines.'.—[Malcolm Wicks.] 
 Brought up, read the First and Second time, and added to the Bill.
 New Clause 49 Content and effect of a section [Contribution notices where non-compliance with financial support direction] contribution notice

New Clause 49 - Content and effect of a section [Contribution notices where non-compliance with financial support direction] contribution notice

'(1) This section applies where a contribution notice is issued to a person under section [Contribution notices where non-compliance with financial support direction]. 
 (2) The contribution notice must— 
 (a) contain a statement of the matters which it is asserted constitute the non-compliance with the financial support direction in respect of which the notice is issued, and 
 (b) specify the sum which the person is stated to be under a liability to pay. 
 (3) The sum specified in the notice is to be treated as a debt due from the person to the trustees or managers of the scheme. 
 (4) The Regulator may, on behalf of the trustees or managers of the scheme, exercise such powers as the trustees or managers have to recover the debt. 
 (5) But during any assessment period (within the meaning of section 104) in relation to the scheme, the rights and powers of the trustees or managers of the scheme in relation to any debt due to them by virtue of a contribution notice, are exercisable by the Board of the Pension Protection Fund to the exclusion of the trustees or managers and the Regulator. 
 (6) Where, by virtue of subsection (5), any amount is paid to the Board in respect of a debt due by virtue of a contribution notice, the Board must pay the amount to the trustees or managers of the scheme. 
 (7) The contribution notice must identify any other person to whom contribution notices have been or are issued in respect of the non-compliance in question and the sums specified in each of those notices. 
 (8) Where the contribution notice so specifies, the person to whom the notice is issued (''P'') is to be treated as jointly and severally liable for the debt with any persons specified in the notice who are persons to whom corresponding contribution notices are issued. 
 (9) For the purposes of subsection (8), a corresponding contribution notice is a notice which— 
 (a) is issued in respect of the same non-compliance with the financial support direction as the non-compliance in respect of which P's contribution notice is issued, 
 (b) specifies the same sum as is specified in P's contribution notice, and 
 (c) specifies that the person to whom the contribution notice is issued is jointly and severally liable with P for that sum. 
 (10) A debt due by virtue of a contribution notice is not to be taken into account for the purposes of section 75(2) and (4) of the Pensions Act 1995 (c. 26) (deficiencies in the scheme assets) when ascertaining the amount or value of the assets or liabilities of a scheme.'.—[Malcolm Wicks.] 
 Brought up, read the First and Second time, and added to the Bill.

New Clause 50 - Section [Contribution notices wherenon-compliance with financial support direction] contribution notice: relationship with employer debt

'(1) This section applies where a contribution notice is issued to a person under section [Contribution notices where non-compliance with financial support direction] and condition A or B is met. 
 (2) Condition A is met if, at the time at which the contribution notice is issued, there is a debt due from the employer to the trustees or managers of the scheme under section 75 of the Pensions Act 1995 (c. 26) (''the 1995 Act'') (deficiencies in the scheme assets).
 (3) Condition B is met if, after the contribution notice is issued but before the whole of the debt due by virtue of the notice is recovered, a debt becomes due from the employer to the trustees or managers of the scheme under section 75 of the 1995 Act. 
 (4) The Regulator may issue a direction to the trustees or managers of the scheme not to take any or any further steps to recover the debt due to them under section 75 of the 1995 Act pending the recovery of all or a specified part of the debt due to them by virtue of the contribution notice. 
 (5) If the trustees or managers fail to comply with a direction issued to them under subsection (4), section 10 of the 1995 Act (civil penalties) applies to any trustee or manager who has failed to take all reasonable steps to secure compliance. 
 (6) Any sums paid— 
 (a) to the trustees or managers of the scheme in respect of any debt due to them by virtue of the contribution notice, or 
 (b) to the Board in respect of any debt due to it by virtue of the contribution notice (where it has assumed responsibility for the scheme under Chapter 3 of Part 2 (pension protection)), 
 are to be treated as reducing the amount of the debt due to the trustees or managers or, as the case may be, to the Board under section 75 of the 1995 Act.'.—[Malcolm Wicks.] 
 Brought up, read the First and Second time, and added to the Bill.

New Clause 51 - Sections [Financial support directions] to [Section [Contribution notices where non-compliance with financial support direction]: relationship with employer debt]: interpretation

'(1) In sections [Financial support directions] to [Section [Contribution notices where non-compliance with financial support direction]: relationship with employer debt]— 
 ''company'' has the meaning given by section 735(1) of the Companies Act 1985 (c. 6); 
 ''group of companies'' means a holding company and its subsidiaries within the meaning given by section 736(1) of that Act; 
 ''holding company'' has the meaning given by section 736(1) of that Act. 
 (2) For the purposes of those sections— 
 (a) references to a debt due under section 75 of the Pensions Act 1995 (c. 26) include a contingent debt under that section, and 
 (b) references to the amount of such a debt include the amount of such a contingent debt. 
 (3) For the purposes of those sections— 
 (a) section 249 of the Insolvency Act 1986 (c. 45) (connected persons) applies as it applies for the purposes of any provision of the first Group of Parts of that Act, 
 (b) section 435 of that Act (associated persons) applies as it applies for the purposes of that Act, and 
 (c) section 74 of the Bankruptcy (Scotland) Act 1985 (c. 66) (associated persons) applies as it applies for the purposes of that Act.'.—[Malcolm Wicks.] 
 Brought up, read the First and Second time, and added to the Bill.

New Clause 28 - Minimum Retirement Income

'(1) The amount of the Minimum Retirement Income shall be set for each financial year following consultation by the Chancellor of the Exchequer by order.
 (2) An order under this section shall, in respect of each financial year after that in which this Act comes into force, be made on or before 31st January preceding the year in question. 
 (3) An order under this section shall be made by statutory instrument and shall be subject to annulment in pursuance of a resolution of either House of Parliament.'.—[Mr. Waterson.] 
 Brought up, and read the First time.

Nigel Waterson: I beg to move, That the clause be read a Second time.

James Cran: With this it will be convenient to discuss new clause 43—Amendment of the Income and Corporation Taxes Act 1988 (No. 2)—
 '(1) The Income and Corporation Taxes Act 1988 is amended as follows. 
 (2) In subsection (1) of section 630 (interpretation)— 
 (a) in the definition of ''personal pension scheme'', substitute for the words ''or lump sums'' the words '', lump sums, or withdrawals from a Retirement Income Fund''; and 
 (b) in the definition of ''income withdrawal'', insert after the word ''annuity'' the words ''or withdrawal of funds from a Retirement Income Fund''. 
 (3) In section 633 (scope of benefits) after subsection (1)(e) there is inserted— 
 ''(f) the payment to a member of income from a Retirement Income Fund satisfying the conditions in section 637B''. 
 (4) In section 634 (annuity to member)— 
 (a) after subsection (1), there is inserted 
 ''(1A) Subject to subsection (7) below, the annuity must provide the member with an annual income not less than the Minimum Retirement Income set under section [Minimum Retirement Income] of the Pensions Act 2004.''; 
 (b) in subsections (2) the words from ''commence'' to the end are replaced by the following— 
 ''(a) before the member attains the age of 50; or 
 (b) in relation to a member who is in receipt of benefits under section 634A before the date of this Act's entry into force, after the member attains the age of 75; or 
 (c) in relation to any member aged 65 or over as at the date of this Act's entry into force, within 12 months of that date; or 
 (d) in relation to all other members, after the member attains the age of 65.''. 
 (c) after subsection (6) there is inserted— 
 ''(7) Section 45 of the Sex Discrimination Act 1975 shall not apply to the annuity provided under subsection (1A). 
 (8) The income provided each year from the annuity under section (1A) must increase by reference to increases in the retail price index, so far as not exceeding 5 per cent.''. 
 (5) Sections 634A and 636A are repealed. 
 (6) Subsection (5) shall not apply to schemes executed before the date of entry into effect of this Act. 
 (7) After section 637A (Return of contributions on death of a member), the following section is inserted— 
 ''637B Retirement Income Fund 
 (1) Subject to subsections (2) and (3) of this section, a Retirement Income Fund is a vehicle for the reinvestment of savings in retirement, which 
 (a) has been established by a person designated by subsection (1) of section 632; and 
 (b) is a vehicle whose investments are— 
 (i) investments of a kind described in the Insurance Companies Regulations 1994, Schedule X, Part 1; or 
 (ii) approved by the Inland Revenue. 
 (2) Funds held in a Retirement Income Fund as referred to in subsection (1) may be withdrawn from the Retirement Income Fund by a member as and when he elects. 
 (3) A member may not invest in a Retirement Income Fund unless the requirements of subsection (1A) of section 634, in relation to the Minimum Retirement Income, are satisfied.
 (4) A Retirement Income Fund, and any income derived from it, must not be capable of assignment or surrender by the member.'.

Nigel Waterson: We are nearing the end of our discussions now—[Interruption.]—but before hon. Members get carried away, we are not that near.
 These two new clauses give us the opportunity for a discrete debate on compulsory annuities. For hon. Members it is not an unfamiliar issue or set of arguments, and I shall try to deal with it briskly. It has been the subject of several private Members' Bills introduced by my Conservative colleagues in recent years. All of those have been resisted by the Government and, where appropriate, have been talked out by eager Government Back Benchers. They do not yet seem to have received their reward, but I suspect that they will in due course. That does not alter the fact that the issues are important for many people. 
 If one goes to the United States and asks people about their system, one finds that one of the fascinating differences is that they have no compulsory annuitisation. Indeed, in many schemes it is not even an option. One can get into a heavy philosophical argument, particularly if one sits down with a bunch of actuaries, about the pros and cons of annuities. What tends to happen in America is that many people will take a lump sum from their pension when they retire and sooner or later it will run out. They will then fall back on the benefits system. The argument that is put for the annuities system in this country is that whatever the cost and the return, once one has bought from a reputable insurance company—I think that only two are still in that business—one is guaranteed to receive that money for as long as one lives. 
 None of those arguments is entirely black and white. During my experience of representing Eastbourne I have received many letters from constituents who bitterly resent the fact that, whether they want to or not, by the age of 75 they must purchase an annuity—an annuity that is probably giving them a return of not much better than half of what it would have done a few years ago. The Conservative party has felt strongly for some time, hence that string of private Members' Bills, that we badly need to bring more flexibility and fairness into the system. The most recent of my colleagues to introduce such a Bill was my hon. Friend the Member for Taunton (Mr. Flook), who is a doughty campaigner on those issues. His Bill was in danger of being talked out a couple of Fridays previously and the business was collapsed. We have recreated the Bill in large measure in the two new clauses. 
 I have said that people currently have no choice and that they must purchase an annuity for at least 75 per cent. of their fund by the time they are 75. Those rules date back to the 1920s and I am sure that at the time they seemed eminently sensible. However, they are clearly out of date; lifestyles have changed, the returns are much less than they were and people are looking for a choice. 
 Unlike the Liberal Democrats there is a party that hopes and expects to be in government again in due course, and we can see the sense of the Treasury's 
 argument. It does not want people to fall back unnecessarily on the state system when in their earlier years they have made provision for a pension fund. That is why the proposals, which I think have much cross-party support, are designed to allow people to have maximum flexibility in their choice of retirement income and to create a minimum retirement income—MRI—so that people need not fall back on state benefits if things go wrong. We say that the MRI level should be set each year by the Chancellor and it is intended to be at a level above pension credit. The sense of having it fixed each year is to allow the Chancellor at any given time to take into account changes to pension credit, to means-testing or to any other relevant factors, to ensure that it remains relevant and effective in carrying out its function.

Steve Webb: As I think the hon. Gentleman knows, the Liberal Democrats have consistently supported those private Members' Bills and I am therefore very much with him on the substance. My impression is that the vast majority of people buy their annuity well before they are 75. For the Committee's benefit, will he clarify how many people this will bite on? How many people per year get to 75 and are forced to buy an annuity? Is it hundreds, thousands or tens of thousands of people? Does he have any sense of the magnitude of that?

Nigel Waterson: I cannot say a number off the top of my head, given my limited resources, but I am sure that the Minister will be able to share that information with us by the time he gets to his feet. It seems that there are a significant number of such people in this country—certainly a significant number in Eastbourne, as I can vouch from my mailbag.
 The intention is that those retiring in future could purchase an increasing annuity that would provide sufficient income to maintain them above the level of state benefits. At the same time, the intention is to create a retirement income fund—an RIF. Individuals with pension funds in excess of those required to meet the MRI would be able to reinvest those savings in an RIF, and there would be no restrictions on when and how much income could be drawn. 
 It will be of interest to many Committee members that the amendments would also introduce gender equality requirements. Annuities could be used to purchase the MRI without regard to the sex of the annuitant. That has also been a very popular move, and has led to support from Liberal Democrats and from some Labour Members. 
 This issue will not go away, for several reasons. First, there is still the problem of low returns on annuities, and people's demands for more flexibility. The second reason is that, as the Government say across the board—in the Bill's provisions, in respect of annuities and on a range of other issues that are outwith the Bill at the moment—people crave less regulation, less bureaucracy and more flexibility in their pensions. If anything is to encourage people back into pension saving, such things will be a factor. 
 The third reason why the issue will not go away is that my party will not let it go away. A number of colleagues have taken opportunities on this issue during the past few years in private Members' Bills, most recently my hon. Friend the Member for Taunton. We will keep pressing this issue until the Government do something about it or until we are in government and can do something about it. 
 There was some comment in the Financial Times recently about the problems of those in the annuity business. Risk is rising faster than anyone had predicted—the ''anyone'', of course, is our old friends in the actuaries' profession, who, as the hon. Member for Northavon says, often seem to have got the wrong answer despite the fact that their sole purpose in life is to sit in a darkened room working out how long we are going to live. 
 There is an extra issue, which is mentioned in the FT report. Annuities are often—or invariably—purchased by people who are wealthier than average, and such people tend to live longer as well. There is a double whammy: the wealthier are healthier, and therefore the cost to insurers goes up doubly—not only because of the general increase in longevity, but because of the particular increase of the better-off, who live in leafy suburbs in places such as Surrey. 
 The Financial Times had this to say on 5 April: 
 ''When Malcolm Wicks, the UK's pensions minister, addressed an economics conference in London last month, he sounded like a man who believed he had solved a problem.'' 
Well, that is the experience of many in this Committee. Often the Minister believes that he has solved a problem, rather than created a new one. However, this is the separate but related issue of index-linked annuities for those on defined contribution pensions. I do not want to go into that in any great detail, not least because it is not currently before us for consideration in Committee, but I think that the Government, partly in response to pressure from us and from elsewhere, have flagged up that this is an unintended consequence of the legislation, and that they will return to the question of defined contribution pensions and index linking, I think, on Report. I think that there was some commitment on that. We are looking forward to that in due course, and no doubt the Minister will be able to update us on progress. 
 The Financial Times made another point, which is key to our new clauses: only two companies—Legal & General and Prudential—remain in the market for annuities, and they both set an annual cap on how much risk they will take on. As the Financial Times puts it: 
 ''Future generations of retirees are at risk of tying their financial security in old age to the credit rating of these insurers.'' 
Will the Minister tell us what the current arrangements are for those who have purchased an annuity from one of those insurers, with all or most of their pension funds, if that insurer were to go bust? Given that there are only two such insurers, the consequences could be disastrous for many thousands of pensioners and future pensioners. 
 The Financial Times discussed the novel idea—I hope that the Minister, with his immense intellectual curiosity, has already started to look at this—of whether the Government should enter the annuities business. It said: 
 ''It is not difficult to imagine that the government will come under pressure to underwrite longevity risk, either guaranteeing incomes for those reaching a certain age or providing some form of longevity hedge.'' 
It talks about an ''index-linked perpetual stock'' that can be bought at the local post office—if one can find one that is still open—and about the 
''added charm of an inheritable pot to pass on to the next generation.'' 
Those ideas are exciting and innovative, and I wonder whether the Government have been considering them. 
 It is not fair to say that the Government have done absolutely nothing to help the annuities sector. They have done nearly nothing, but not absolutely nothing. [Interruption.] I want to be fair to the Minister. They have made proposals, which I believe came from the Treasury, about what is called alternatively secured income, or ASI, but they are retaining the rule that any money left in the ASI after death cannot be returned to heirs as a capital sum. Apparently, it will be possible for pension income to be delivered through ASI after age 75—it will be interesting to see how far that idea has got—but as it states in the Library notes that have been provided to me: 
 ''ASI is likely to be an inferior choice for pension savers without dependants and who do not have a principled objection to the pooling of mortality risk.'' 
I should add that some groups, such as the Plymouth Brethren, do not wish to get involved in annuity purchase because it is contrary to their principles—for example, on religious grounds. I assume that such groups are still obliged to buy an annuity at the age of 75 whether they want to or not, but I may be wrong about that. 
 The Library notes say: 
 ''The product may be converted to a guaranteed pension for life or an annuity at any time at the member's discretion.'' 
As the notes say, the Red Book is ''less forthcoming'' this year. There is some talk in the book, which I am sure that the Minister will amplify, about offering more flexible annuity rules that stimulate innovation by allowing for the provision of limited period annuities and value protected annuities, but there was no further elaboration on that, and there was no mention of any annuity changes in the Chancellor's speech. If those modest moves are the beginning of yet another U-turn—on compulsory annuitisation, in this case—in a season of U-turns, no one will be happier than I. 
 There is something to please everybody in the new clauses: they would produce fairness and flexibility for pensioners, deal with gender inequality and ensure that the Treasury does not end up with an extra burden because people unnecessarily fall back on the state for their living. All in all, they address an injustice that has existed for far too long. People simply cannot wait for the market to return—if it ever will—to a situation in 
 which returns on annuities are at the levels that they were at a few years ago. I commend the new clauses to the Committee.

Steve Webb: As I indicated in an intervention, the Liberal Democrats in general support the principle behind the new clauses and we have supported the series of private Members' Bills that have attempted to implement something along the same lines. We restate that support now.
 In parentheses, although the hon. Gentleman said that the system has been running for 70 years or so, its most recent incarnation was the Pensions Act 1995, which, I think, required annuity purchase at 75. I have still not been able to get my head round the fact that the Conservatives happily tolerated that rule during the 18 years in which they were in government but suddenly regarded it as dreadful once they were in opposition. I am sure that there is a good reason for that, but I have not quite worked out what it is.

Nigel Waterson: The hon. Gentleman positively goads me to intervene.

Malcolm Wicks: We are all getting on.

Nigel Waterson: We are all getting older, as the Minister says—some faster than others. To be blunt, one major reason for what the hon. Member for Northavon described is that the returns on annuities have fallen so sharply in recent years. There is nothing controversial about that.

Steve Webb: From which I infer that the Conservative stand is not an issue of principle. Presumably then, if childhood obesity worked its way through and annuities were to rise, there would be no reason to change the rules. For many people, however, the issue is one of principle. The state should not require people to do things that it does not need them to do. It seems that the taxman's interest would be satisfied if two conditions were met. First, having given tax relief on the way in—in the fund, except on dividends, and, potentially, on a lump sum of one quarter—the tax man must expect to tax that income once. If someone indefinitely defers buying an annuity and eventually dies, there needs to be a tax take. Indeed, I believe that there is one, at a special rate of 35 per cent. Such a structure seems to work. The Inland Revenue argument that the Treasury should receive its tax therefore falls. The Treasury indeed receives its tax, although, admittedly, it has to wait for it. We can cope with that. I am not worried that there is a tax issue, because the tax ultimately gets collected in respect of the money that was given earlier in life. The first condition is therefore met.
 The second condition is dealt with in new clause 28, which tries to put the floor in place. We do not want people to have tax-relieved savings all their lives, blow the lot on a foreign cruise, ring the pension credit line and say, ''Hello, I'm poor and I'd like some Government money.'' That would be unfair, but, even if we leave aside the inherent implausibility of that scenario, a floor needs to be put in place. 
 I am concerned about new clause 28, however, because the floor is astonishingly high. The hon. Gentleman said that the floor would be at the pension credit level. In other words, the portion that had to be converted into an annuity would, on its own, lift somebody completely clear of the minimum income guarantee. That ignores the fact that most people will have a full basic state pension. Given what I understand the hon. Gentleman said about the level at which the MIG would be set, crudely, if the pension was £80 and the MIG was £105, people would be required to buy an annuity equivalent to £125 rather than £25, which would be an addition to the basic pension to bring people clear of the MIG. I leave the savings credit to one side in my analysis—it muddies the waters somewhat and should have been scrapped a long time ago. If I understand correctly, the hon. Gentleman is imposing a burden five times as big as he needs to. The mandatory bit should only fill the gap between the basic pension and the MIG, not replace the entire MIG. 
 There is a further complication, in that the MIG is earnings-indexed—I do not think that that is Conservative policy, but the status quo is earnings indexation. There is a grey area over replacement by means of purchasing an annuity and earnings-indexed income. The hon. Gentleman explained the problems that providers face in providing a price index of best income. Replacing an earnings-indexed income would be hugely expensive. If the new clauses were literally implemented in the way the hon. Gentleman suggested, I wonder whether anybody would be helped at all. I suspect that there are very few people, even in Eastbourne, who accumulate enough money to replace £105 a week, earnings-indexed, with the amount of money in their pot. There may be a few such people, but that does not address the underlying issue about which many people write to us. 
 One would need to think hard about how to define minimum retirement income. It would need to be the top-up amount, not the full amount. Unfortunately, that could be different for everybody, and that introduces a new tier of complication. All of it would need to be worked through, but I recognise that the new clauses are designed to make a point rather than to prescribe procedure. 
 I have two other reservations about new clause 43. The first is that, perversely, it demands an indexed annuity. I do not understand that, because the hon. Gentleman rightly highlighted earlier what bad value an indexed annuity would be for many people with a money purchase pension. Many people would lose the bet; they would have been better off had they not bought indexed annuities. However, in the name of freedom he is going to force people—the vast majority of whom, given a free hand, do not buy indexed annuities—to do so. It gets worse. If I read proposed new subsection (1A)(d) correctly, he will require everybody to do it at age 65. 
 When the hon. and learned Member for Harborough (Mr. Garnier) introduced a similar measure, I queried on its Second Reading the age limit of 65. Why 65? If people do not have much money in 
 their pot and we tell them that at age 65 they have to blow a vast swathe of it on buying an indexed annuity that replaces the whole of the pension credit, it will be almost completely useless. I do not understand, but I am sure that the hon. Member for Eastbourne will explain why it has to be indexed and why it has to be at age 65. 
 The hon. Gentleman made an interesting plea for the nationalisation of annuities, and I am with him on that—we lefties have to unite occasionally. The state is extraordinarily well placed to provide annuities. We are in the bizarre situation in which annuity providers trying to make a profit are struggling—they will probably run out of gilts to buy if things go on as they are, and there might not be much of a market. The Government have to make sure that annuities are available and can provide them more cheaply than anyone else because the annuity providers have to build in a profit, as well as putting in a mark-up to allow for unexpected improvements in life expectancy. That is just the sort of thing that the state is good at—it can achieve smoothing between generations on a not-for-profit basis. I can see the argument against the state's doing something that undercuts the private sector. However, given that the private sector is struggling to do it at all— 
 Adam Price (East Carmarthen and Dinefwr) (PC): Market forces.

Steve Webb: Market value, as the hon. Gentleman says. The state providing annuities or being an annuity provider of last resort, perhaps through national savings, seems to be a good idea. When I raised the matter at a pensions talk that I gave recently, the right hon. Member for Birkenhead (Mr. Field) was sitting next to me and pointed out that the great 19th-century Liberal Governments ran nationalised annuities. Annuities used to be provided by the Government. If that were done now, it would provide better value for annuitants, which is what all of this is about. Although it is a peripheral observation, I support the principle and am delighted to see that the cause of nationalisation beats in some breasts in the room.
 In principle, if the taxpayer's interest is protected in terms of getting his tax take and not calling on means-tested benefits, there is no reason why there should be any requirement to buy annuity at a particular age. Once those two requirements are satisfied, people should be able to do what they want. The way in which this is drafted seems remarkably restrictive: it has to be bought at 65, has to be indexed and has to replace the whole of pension credit. All of that undoes most of the good that the new clauses aim to do. We support the principle behind the new clauses, but do not think that, when the next great Liberal Government come to implement the changes, we will do it like this.

Malcolm Wicks: It has been interesting to hear about the future Conservative and Liberal Democrat Governments as I have always enjoyed political science fiction. It is also great fun to hear the hon. Member for Eastbourne being scrutinised so diligently and in such detail by the hon. Member for Northavon.
 I know that a flurry of notes, some in barely decipherable writing, will reach him—not that that ever happens to me—and he will be able to answer the questions.
 The debate is interesting and I am sure that the House will return to it, as has been promised—or threatened. However, the essential matter is that pension schemes are pension schemes. They are designed to give people a secure income to last the whole of their retirement. The annuity is, virtually by definition, such a guarantee to pay an income for life, no matter how long that life turns out to be. Over the decades, successive Governments have brought forward fiscal tax advantages for such arrangements. 
 What is being proposed is that over and above a certain level something intended to be a pension will become simply a capital sum for the individual to use as he or she likes. One can argue about the pros and cons of that, but I have no doubt that the fiscal arrangements would have to be rather different. I repeat that a pension is a pension, not a way of accumulating a large capital sum. There is a fundamental difference.

Gregory Barker: I understand the Minister's point that a pension is a pension, but for most of my constituents who are facing retirement or have retired this is not merely a question of securing a secure income in retirement. It is about securing sufficient income in retirement. The prospect of a secure income that will not meet their needs and will force them on to increasingly means-tested benefits is abhorrent to them. They should surely be given the right to explore other avenues that will keep them off the means-tested benefits and allow them to get the maximum from their hard-earned savings.

Malcolm Wicks: Let me pursue my analysis. The proposals, as we have heard, aim to free pension scheme members from the need to buy annuities with funds above a minimum retirement income, designed to ensure that they will never fall back on income-related state benefits. Any freedom to build up larger pension funds is clearly restricted to wealthier individuals. There would be no such freedom, of course, for those with modest pension pots who are now gaining from pension credit.
 When this idea was first put forward as new clause 27, withdrawals from its proposed retirement income fund were to be taxed under schedule E of the Income and Corporation Taxes Act 1988. However, that requirement has been removed so it is no longer clear how these withdrawals would be taxed, if at all. If by some fluke this proposal were to become part of the Bill, it would be both anomalous and inequitable. 
 The Government share hon. Members' desire to encourage people to save for their retirement.

Nigel Waterson: It is good of the Minister to have spotted that little lacuna in the new clause. The problem is that had we left in a provision that dealt with that point, it would have taken the proposal, and
 therefore this debate, outside the Ways and Means resolution attached to the Bill. However, if he is happy to take the new clause away and redraft it, or to amend the Ways and Means resolution, who are we to complain? I am hopeful that by the time the Bill is considered on Report we might be able to finesse that point to his satisfaction.

Malcolm Wicks: Let me proceed, having noted that kind offer, although I do not think I can accept it.
 I was saying that the Government share hon. Members' desire to encourage people to save for their retirement. Much of the Bill is about that. However, our approach has been to develop a radical simplification of the existing complex tax rules, which will give greater individual choice and flexibility to all pension scheme members and not just the privileged few. 
 As part of the tax simplification, the annuity rules will become more flexible, allowing three new innovative products. The limited period annuities will allow people to use part of their pension fund to provide an annuity for a predetermined period. Value protected annuities will allow a residual payment to be made on the death of an annuitant before the age of 75. The alternatively secured pension will allow an income from a regulated product, which offers similar security to that provided by the pooling of mortality risks in an annuity. That last product was developed after consultation with the Christian Brethren, because of their theological inability to make use of mainstream annuities. Indeed, I remember having an interesting conversation with the Brethren in my constituency office. They say—I hope I have got the argument right—that it is not for them to make any judgment on their life expectancy, because, according to their beliefs, that is a judgment that only a higher authority can make. 
 It is an example of the sensitivity of not only this Government, but our system, that we have been able to take on board such ethical and theological objections and develop products that I hope will suit the Brethren's requirements. Those products will, of course, be a feature of the Finance Bill, and I believe that it is best to discuss them while debating that Bill. 
 We believe that, in view of our radical reform of the pension tax rules, which offer improved retirement opportunities for all, the new clause, which would benefit only a wealth minority, is clearly inappropriate.

Gregory Barker: Will the Minister share with the Committee what research he has undertaken to allow him to say with such authority that the new clause would benefit only a wealthy minority? Has he considered the disincentive to save for pensions, which is perpetuated by this rigid treatment of annuities? Is there not a real case for believing that there is a direct causal link between the Government insisting on annuities and the decline in people saving in pensions, rather than in other products?

Malcolm Wicks: I have seen no evidence for the last point. We do not accept the whole proposal, but—I think the hon. Member for Northavon was teasing this
 out—there is a perfectly sensible sub-proposal that there should be some requirement for people to have at least some of their money in an annuity, so that they do not have to depend on the state. That, in essence, is the argument, but, by definition, those above that level are the better-off.
 Although I do not have the figures in my head, I know that there is evidence that the average defined contribution pension fund is surprisingly small. The number of people with large pension funds is also surprisingly small. I think that there is empirical evidence to back up my proposition and, as an empiricist and a Fabian, I am pleased that that is so and that we have an evidence base for what we say.

Steve Webb: I am sure that what the Minister says is right, but there is something that I can never get my head round in relation to the Government's approach: once the safeguards were in place—once the Government were sure that the taxpayer would pay their tax and that the benefit system would not be troubled—what would the Government have to lose? There is, potentially, a utility gain to giving people choice. Is the proposal not a win-win? Once the state has satisfied its requirements for tax and means-tested benefit expenditure, what does it gain by this extra obligation?
 The Minister may bat me away now, but I hope that, when he lies in bed tonight, he will ask himself whether the additional requirement makes the world a better place. Clearly, some people are losing freedom, and so utility, but who is gaining?

Malcolm Wicks: Well, sad person that I am, I have occasionally woken up in the morning worrying about the Bill, so perhaps I will reserve one of those mornings—possibly Thursday morning—for a longer think-through of the provisions.
 One of the essential aspects is the fiscal point. What if one started with a clean sheet of paper and asked whether it would be sensible for the state heavily to subsidise the ability of the rich to accumulate capital for later life? I do not think that anyone would rationally say, ''Yes, not only is it good that people can accumulate capital, but we should give the very rich huge fiscal incentives to do so.'' In all honesty, I do not think that any of us would devise such a scheme. Saying that there might be some sense in pension savings having a tax advantage is altogether a different kettle of fish. I will carefully read what the hon. Member for Northavon said about the tax aspect. The fiscal point is very serious. 
 There is a grave difference between the public and private arrangements that the state should make for weekly or monthly pensions, and the incentives that there should or should not be to enable people to save lump sums. Both are good things, but the public interest in each is different.

Nigel Waterson: At the risk of causing the Minister more sleepless nights, let me mention the debate starting in the United States, of which he will be aware. The Republicans, who, on this issue, seem to be closely aligned with the hon. Member for Northavon, are pushing for more flexible pension savings vehicles,
 with much more access to funds before retirement, although there is a worry that people will use them to buy a boat or pay their children's college fees. That view is balanced by the inevitable argument that the state, particularly when providing tax relief, will want to ensure that funds are kept in place to provide for retirement, to paraphrase what I think the Minister is saying. That is the standard view of Governments.
 I do not know where the Minister, as a Fabian, stands on that philosophical argument, but does he not take the point made by the hon. Member for Northavon? Why should the state interfere once it has secured its own position—the benefits position?

Malcolm Wicks: I have tried to provide part of the answer to that question. The state, via the taxpayer, will have heavily subsidised the accumulation of funds. I am not quite sure what tax treatment the Opposition propose for something that, for many individuals, albeit a privileged minority, is essentially a savings vehicle. It might, in small part, need an annuity to protect against income testing, but it is, in very large part, simply a means of accumulating capital. I am not sure what the Tory party thinks the tax treatment for such arrangements should be. No doubt the hon. Gentleman will want to say something about that when he sums up. That, however, is the essence of the issue.
 In a way, the hon. Gentleman's argument is that allowing people to have their capital would enable them to accumulate more income through investment. 
Mr. Waterson indicated assent.

Malcolm Wicks: Well, much of that investment would, by definition, be riskier than the annuity route. Things go up, and things go down. Risky investments that reduce capital amounts could have implications for people's ability to pay for their own long-term care, should they need it.

Nigel Waterson: Perhaps I can deal with the Minister's point now rather than making him wait for me to sum up. I can see that he, as a convinced Fabian, rather looks down his nose at people accumulating capital, as he puts it. In an attempt to increase savings, however, the Government—no doubt against the desperately worrying background of savings having, in effect, halved during their stewardship—have not been averse to vehicles, such as ISAs, which use fiscal means to encourage people to save. We are not discussing the Finance Bill so we do not want to go too far down that road—I certainly will not do so—but there is an issue, simply because the savings culture has declined so badly in the past few years.

Malcolm Wicks: I do not accept much of that, but I put it to the hon. Gentleman—he can consider this when he sums up and makes his final attempt to convince us—that, on average, £30 out of every £100 that goes into a person's pension pot comes from the Exchequer. If the hon. Gentleman's proposals were to be accepted, and much of that was not for a pension but for a capital sum, would he argue the case with the
 British electorate that it was right to subsidise it to such an extent? [Interruption.] It is a question that I ask of the hon. Member for Eastbourne. Is the hon. Member for Bexhill and Battle seeking to intervene on my question?

Gregory Barker: I was intervening on the Minister's point.

James Cran: Order. Is the Minister giving way?

Malcolm Wicks: I give way.

Gregory Barker: I remind the Minister that the money comes from the British taxpayer, not from Ministers or from the Exchequer.
 I return to the Minister's point about a subsidy for pensions. We would take a rather different view of whose money was being used, but he said that it was potentially a subsidy for the rich. Can he confirm that he does not propose to take away what he calls a subsidy—what we would call an incentive to save? It should not be a question of whether it will be withdrawn but of how it is used. Most people would define a pension not as an annuity but as money that will be available to them in their old age. Is the Minister saying that a pension is only an annuity? Does he not see that a pension could be the income derived from a multitude of sources?

James Cran: Order. I did not intervene in that intervention, but hon. Members who wish to make a speech need merely to catch my eye.

Malcolm Wicks: That is the question that I put to the hon. Member for Eastbourne. It is one thing to say that the state has an interest in people having a decent pension in old age, and that has traditionally been subsidised through the tax system. However, the hon. Gentleman seems to think that it is the same—I would say that it is rather different—as saying that similar tax arrangements should be made for a richer group of people in order to allow them, in large part, to use their funds as a capital lump sum. It is of a different order.
 I obviously realise that the Government do not have any money of their own, but the tax advantages mean that the Government have to raise the money from other sources. Those other sources often include people on lower incomes—people who cannot make use of the opportunities that the hon. Gentleman's amendment would allow. 
 I shall try to make some progress. I have the figures: 72 per cent. of all personal pension pots that are annuitised are worth less than £20,000, and 52 per cent. are less than £10,000. The hon. Gentleman's proposal, whatever its virtues, is designed to help only a small number of quite wealthy individuals. Given that, we should not be surprised that the suggestion comes from that quarter. The average size of pension funds is surprisingly small, and we obviously need to do more about that. 
 I am advised that the Inland Revenue does not keep figures on the ages at which people buy their annuities. I therefore have no answer to the question of how many people reach the age of 75 before buying an annuity. 
 On another question asked by the hon. Member for Eastbourne, we shall be tabling amendments to remove the requirement for limited price indexation in defined contribution schemes, as I promised. However, that may not be until the Bill reaches the other place. 
 I suspect that I have convinced the hon. Gentleman to withdraw the amendment, but if he has any remaining doubts, I am sure that he will tell us.

Nigel Waterson: Needless to say, I am disappointed by the Berlin wall approach taken, by all levels of Government and all Departments, to an extremely sensible suggestion.
 I am grateful to the hon. Member for Northavon for what I am sure were designed to be helpful suggestions to improve our proposals. We will reflect on them, and draw on them as much as we can. I wish that I could say that I would write to the hon. Gentleman on his comments about the age of 65, but I have no one to write the letter for me. [Interruption.] I may write him some explanatory notes when I have a quiet afternoon. 
 I hope that we have a broader and longer debate on Report. I know that their lordships are also keen to have the issue aired and, as I promised the Minister, it will not go away. 
 The Minister raised some technical points about which he may or may not be right. I am not in a position to judge, but we will have a look at them. He understates the number of people who would see this option as something that they would like at least to consider. We on the Conservative Benches have never been embarrassed by people who are wealthy and successful; they are the drivers of our economy. It was, of course, the Thatcher years that liberated that ability and drive for the benefit of the whole population. We will return to many of these issues on Report, and I suspect that parallel debates will take place in the Finance Bill Committee.

Gregory Barker: Given that my hon. Friend's proposal is fiscally neutral, does that not expose the Minister's objections as gratuitously political and chippy and nothing to do with the long-term funding of pensions?

Nigel Waterson: As always, my hon. Friend understates his case. I have accused the Minister of being frisky before; I suppose chippy is the new word to be added to the vocabulary.
 In fairness to the Minister—although God knows why I should be fair to him—we should try to disentangle two slightly different points. First, there is the point about the Treasury line, and why private Members' Bills have been refined over time. The legitimate concern of the Treasury is that people should not fall back on benefits because they have blown their pension funds on ill-advised things. I understand that point, which is addressed by the new 
 clauses, and if there is some technical reason why the new clauses cannot pull that off, the Government have a battery of people to make that right. 
 The Minister's slightly separate point was that the tax system gives people incentives to put money into pensions in the first place. Without wanting to blunder into the responsibilities of those dealing with the Finance Bill, it does so first for the hard, political and good reason of trying to encourage savings against the background under this Government of a collapse in the savings culture. At this moment in history, any Government would be desperately looking for ways to encourage people back into saving before we all hit total disaster. 
 As well as that fiscal incentive, we are talking about money coming out of people's hard-earned salaries and wages. If people accumulate, by dint of hard work, largish funds that will help them in later life, that money will be spent on things that benefit other members of the population, prevent them from being a burden on the benefits system, and take them out of means-tested benefits, which will be something of an achievement when the proportion of means-tested pensioners has been rising inexorably under this Government. There will also be tax to be paid back to the Exchequer when they start drawing their pensions. It is not as if these people have all gone off to some desert island and are free of the tax regime.

Gregory Barker: Also, that money will be far more productive for the economy as it will be recycled into investment through the stock market, property, venture capital trusts or businesses. It will not be simply dead money drawing annuities.

Nigel Waterson: Yes—[Interruption.] No, that is a fair point. There is a great debate raging—

Malcolm Wicks: Will the hon. Gentleman give way?

Nigel Waterson: When I have finished my sentence or paragraph.
 There is debate already raging about whether equities will ever get back to the level at which they have been in the past, and what the long-term implications of that are for pension savings. That debate is still to be determined. The Minister is making a false distinction, which I suspect is based not on rationality and intellect but on his gut, left-wing, Fabian feeling about people who have a bit more money than others.

Malcolm Wicks: I am glad that the Fabian Society is getting such good publicity.
 I do not want to be churlish, because I understand that if the proposal were to happen, some people would invest in all sorts of ways that would benefit the British economy. On the other hand, there would be no requirement to and some would invest in a luxury yacht.

Nigel Waterson: Yes.

Malcolm Wicks: The hon. Gentleman agrees. Therefore, does he have a view about whose economy would benefit from that?

Nigel Waterson: As I was a shipping lawyer in a different life, I obviously have strong views about luxury yachts. Indeed, I once acted for Ivana Trump in respect of one that was built in Italy.

Malcolm Wicks: The hon. Gentleman is shipping water at the moment.

Nigel Waterson: Shipping water—[Laughter.] Luxury yachts are built in this country. I suspect that hardly any members of the Committee, with the possible exception of my hon. Friend the Member for Bexhill and Battle, could afford one.
 The point that I was making is that that money will not disappear into the ether. It is money that has been hard earned, where people have admittedly had an incentive to put it into pension funds. It has then been invested in equities in British industry and commerce, and at the other end it comes out and there is tax.

John Robertson: Cigarettes.

Nigel Waterson: Cigarettes, armaments—all of those things with high returns that people often invest in—and many other good things as well, which provide employment and wealth for all levels of society, are involved. Therefore we are not at all apologetic. The Minister seems to be trying to launch a frontal assault on the pensions industry, which is rather bizarre given his job description. Maybe he has finally lost all sense of perspective as we reach the end of the Committee stage, but he must reflect on the massive importance of the pensions industry in this country.
Malcolm Wicks rose—

Nigel Waterson: The Minister must contain himself for a minute.
 Clearly, the pensions industry has been, and is going through some major problems, but that does not mean to say that it is not a massively important part of the British economy in all sorts of ways.

Malcolm Wicks: Far from launching an attack on the pensions industry—it was the hon. Gentleman who mentioned armaments so I do not know what his comment was for—we are working with it to develop it for the public's benefit. My argument is that the pension funds should be used for pensions. That is something that a Pensions Minister has a right to argue.

Nigel Waterson: I see that, but I think that the Minister is also sidling up to an argument against tax relief on pension contributions. If I am wrong about that, I would be delighted. Even his right hon. Friend the Chancellor backed away from that kind of change in the situation. Indeed, given the perfect storm scenario that we keep discussing about pensions, that would probably be the final straw.
 All that I can do is to return to discuss the system in the United States and to compare and contrast. As I have said, a very different system operates there and it has no compulsory annuitisation. We see the need for some flexibility and there is no reason at all why we should be fixated on the traditional route of pension 
 fund, annuity purchase and so on. People can provide for their retirement in all sorts of ways and in America they do. Half of them do not have a pension fund at all, but of those who do, not very many opt for annuitisation. In many cases it is not even on offer and it is certainly not compulsory. They take the money as a lump sum, invest it in shares or do something else. If there is a lesson or a theme to the entire piece of legislation in all its grisly detail and internal contradictions, it is that to make pensions more successful and attractive going forward—to use a favourite phrase in the Minister's notes—it is essential to introduce more flexibility. That is one of the crucial attractions of our new clauses. 
 Having said that, I have promised endless debates reaching into the distance on Report, in their lordships' House, in the Finance Bill Committee and beyond, and on that basis I beg to ask leave to withdraw the motion. 
 Motion and clause, by leave, withdrawn.

New Clause 29 - Pension position of women

'The Secretary of State shall prepare an annual report setting out changes made to the pension position of women.'.—[Vera Baird.]
 Brought up, and read the First time.

Vera Baird: I beg to move, That the clause be read a Second time.
 The justification for the new clause is that women constitute 64 per cent. of pensioners, but the average female pensioner's income is 57 per cent. of the average male pensioner's income—so at the moment pensions do not work well for women. An annual report would monitor their improvement. The new clause is also rooted, to an extent, in the approach of the Green Paper, on which I congratulate the Minister. It contains a chapter on women and pensions, highlighting the problems faced by women. 
 However, the Green Paper does not recommend using pension policy as a solution. Rather, it sees the answer in the changing patterns of women's lifestyles. It anticipates that they will become closer to the original Beveridge model by being involved more fully and for longer in the work force with higher, more consistent earnings and, consequently, able to obtain, through national insurance, better state provision and, through investment, better private or occupational provision. 
 The factors that will improve women's pension provision will, ironically, come from other Departments. Help with child care from the Minister for Children will enhance women's ability to earn more for longer and to get themselves better pensions. Such factors, from diverse sources, influence lifestyle. It is important to keep an annual check on whether that is working. 
 I know that my hon. Friend the Minister is going to refer to pension credit and I should like to acknowledge the role that that has played in helping poorer women to enjoy reasonable standards of living in retirement. It is because they are unlikely to have full pensions—and even less likely to have occupational pensions—that pension credit has been so efficacious for women. In a sense, it bridges the gap while women emerge more fully into the labour force and become better able to develop self-sufficiency in retirement. I suggest that it needs monitoring to ensure that it is truly a continuous process—women are coming more fully into the work force and getting richer in that way. 
 Between 1979 and 2002, the number of young women in the work force increased from 52 to 70 per cent. In the past two years, there has been little increase in the number of women working full-time in the work force. They do much more part-time work, and it is difficult to accrue a good pension if one is working part-time. 
 The other thing about women becoming more ''Beveridgised'' and able to provide for themselves is that it is an extraordinarily slow process. Equal pay has been with us since 1970—implemented since 1974—yet Fawcett calculates that the average income of women in full-time employment has gone from two thirds of average male income to three quarters in 30 years. At that rate, it will be another 70 years before there is equal pay. That means, as I have said many times before, that my great-great granddaughter will start her working career on the same pay as my great-great grandson, with an equal opportunity to accumulate equal pension at the end of her working life—it will apply to no woman before her, and even then that assumes that women will come completely into full-time employment. 
 I suggest five very quick and fairly cheap things that would speed up the process of women's becoming better equipped to provide their own pensions, and that would recognise the continuing place for women's caring responsibilities and reward them appropriately. To begin with, we should consider the lower earnings limit of £77. Anyone who earns less than that neither gets credited with a national insurance contribution nor pays one. Therefore, although someone might work for 15 hours on the minimum wage, she is not able to make a contribution to pension provision. If the lower earnings limit were lowered by £10, 200,000 women and 60,000 men would be able to start contributing. 
 Many women—I frequently come across examples in Redcar—have more than one job. They might, for instance, work as dinner ladies at lunchtime, while the children are at school, and then in a convenience store in the evening when their partners are at home. They may earn far more than the LEL, but they cannot aggregate the two lots of pay to make a contribution to their pension. They may be working long hours and earning quite reasonable pay, but they cannot aggregate so they cannot contribute either. 
 I suggest that the carer's credit could also easily be changed. Child care is dealt with by the home responsibilities protection, which cuts the number of 
 years that one needs to pay national insurance to accrue a pension, but it only functions for a whole year. If I took nine months of a year off work to look after my child and I went back for the last three months, I would lose the whole year's national insurance contributions. The home responsibilities protection would not work unless I were off for an entire year. 
 However, the carer's credit only applies to non-child care for basic state credit purposes, although the state second pension is slightly different. The carer's credit is only given to a carer who gets a carer's allowance because they are looking after someone for 35 hours a week. That is problematic. Last weekend, I think, the Prime Minister announced that we were considering availing carers of the ability to ask for part-time work, by analogy with the family-friendly work that working parents can ask for. 
 However, if a carer took a part-time job, they would not be able to qualify for the carer's allowance by working 35 hours as a carer, so they would lose their carer's credit. If their part-time earnings did not take them over the LEL, they would not pay national insurance either; they would fall through both loops. There is a real need for child care credits and carers' credits to come in a simple, weekly credit for every week that someone is at home caring for another person, which is a major contribution to society and saves the Government millions and millions. 
 The 25 per cent. rule, as the Minister well knows, states that anyone who pays national insurance for less than 10 years—that is, less than a quarter of the amount of time that they would need to pay to get a full pension—would not get anything at all. It is hard to see what the justification for that is, apart from some ancient rule of book keeping. 
 All of those quite cheap and not complex processes could help to speed up the evolution to pension equality for women, and give appropriate financial credit to them when they are working in their caring role. It is only realistic to acknowledge that women are likely to continue to live lives of caring mixed with work, even if the proportions change.

Steve Webb: I echo the spirit of what the hon. and learned Lady says. Will she clarify how far what she says is dictated by political realism—by the notion that the most one can expect a Government to do is fiddle? As she correctly said, it will be three generations—or whatever—before anything happens from the labour market. What she talks about will make welcome but minor changes to a bigger percentage of inadequate pensions 20 years down the track. Would she like to go a lot further and to see something much more dramatic done for people who will be pensioners in the next five or 10 years?

Vera Baird: I have my own wish list. Sometimes, when I am in bed on my own, I think about the Pensions Bill as well.

George Osborne: Which is not very often?

Vera Baird: Good point.
 There are all sorts of wider-ranging debates about citizens pensions, for instance, because women would not be assisted at all—or at all significantly—if the basic state pension were upgraded to the minimum income guarantee level, which is the usual demand of pensioners forums. Only 13 per cent. of women have a full basic state pension. They would lose pounds and pounds in comparison to what they now get from the minimum income guarantee. 
 There are arguments for a citizens pension, but they are big ones. Confining oneself to simple steps available now would make a real improvement. I do not think that the issue is about political reality in any base sense, but about a debate that will take a long time to get through. An entirely new basis for pensions—one which would cut them loose from national insurance contributions—would, I suspect, be quite a long way off, and quite a knotty issue. However, if those relatively small steps were taken—and they would all help older women—the annual report would, of course, show significant improvements. 
 I have a final base point. There is no doubt in my mind, empirically, that older women off the streets, as it were, of Redcar are aware of their pension inequality. Some leaked polling in The Observer last weekend suggested that women over 55 are very interested in the influential issue of pensions. Women over 55 have a very high turnout rate at elections—67 per cent. compared with 36 per cent. of women of age 25—and although traditionally they voted for the Tories, in 1997 more voted Labour than Tory. However, in 2001 the Tories recovered: 40 per cent. of 55-plus women voted Conservative, and 38 per cent. voted Labour. That shows that this is a group that can be influenced by the policy issues that concern them, of which pensions is one.

Nigel Waterson: I know that the hon. and learned Lady is keen to paint a complete picture. She will have seen the report published yesterday showing that it is precisely those older women who are becoming more rapidly disillusioned with this Government, on a whole raft of issues, than younger women or male voters.

Vera Baird: I have to confess to not having concentrated fully on the report to which the hon. Gentleman refers, but it is clear from the quite old polling I mentioned and the leaks in The Observer last weekend that older women are concerned about pensions. There is evidence that they move from party to party and are influenced by serious considerations. The other reasons for making the changes—notably, equality and equity—are much better ones, and we will be addressing inequality soon, but I point out that dealing with pensions, and reporting on the improvements annually, could be electorally helpful.

Janet Dean: I rise to support the new clause tabled by my hon. and learned Friend the Member for Redcar (Vera Baird). It would enable women's pensions to be kept under review and allow us to monitor improvements, and it would also provide an incentive for us to look at the ways in which we can improve women's pensions.
 Women have lost out in various ways. There are those who were encouraged to pay the women's reduced rate, and carried on paying it when they would have been better advised not to. There are those who have been careless, although sometimes people do not consider themselves to be so. There are those who might not have always claimed their benefits: they might have looked after a relative who is elderly or has health problems, and manage as best they can without thinking of their own position for national insurance purposes and in terms of their pension in future. 
 We are encouraging women to go back to work after having children, and as there is better child care now, more women are doing so. However, there will still be periods when people—mainly women—stay at home to care for the children. As we know, home responsibility protection covers the full tax year. My hon. and learned Friend referred to the following problem: in any tax year, it might happen that there were only a few weeks in which the carer's responsibility allowance was paid. If, say, a child reached a certain age, or the woman went back to work part-time at a lower rate and so did not pay national insurance stamps, that year would not be counted because it was not a full year. 
 There is also the issue, as my hon. and learned Friend said, of low-income and part-time work. Again, people might have several jobs but still not pay national insurance. In the past, it was mainly women who were in that situation, and I suspect that that will still be the case in future, because that is the nature of family life in most homes. 
 The aspect of most concern is the 25 per cent. rule. The fact that people can pay for nine years and not receive anything is an indictment of our system. With modern technology and computer programs—although I know that most Departments have problems with computer programs—it ought to be possible to recognise all the years for which a person has paid and for them to have a percentage of the pension due to them, rather than people paying for eight or nine years and receiving no pension at all. 
 I know that my hon. and learned Friend will say that the pension credit will step in in certain situations. I would like to pay tribute to the Government at this point for introducing the pension credit and addressing the problems of poorer pensioners, who are mainly women, by raising the minimum income guarantee and linking that back to wages, a procedure that was broken under the Conservative Government. Since 1997, the Labour party has done good things to try to benefit poorer pensioners and, as I say, those pensioners are more likely to be women than men. 
 I hope that my hon. Friend the Minister will review the 25 per cent. rule. Simple things can be done, as my hon. and learned Friend has said, which will benefit women pensioners today and in the future. I hope that the Minister will consider introducing a fairer system of carer's credit for those caring for children and for other adults, and that he will reduce the lower earnings 
 limit, because the fact that those who are working part-time and earning the minimum wage are still not credited with national insurance cannot be right in this day and age. 
 My hon. and learned Friend did not mention one thing, which I hope the Minister will consider—namely, the option of allowing extra back years to be purchased. At the moment, only up to six back years that have not been paid can be bought. If someone who may have been credited with only nine years could purchase years beyond the six years from when we are notified, it might be of value in attaining some sort of pension. Of course, some people may not be able to afford those back years, but they ought to have the option. It may be that they need purchase only several weeks of a year in order to have a whole year's credit towards their pension. Again, I ask my hon. Friend the Minister to consider that.

Nigel Waterson: I shall be relatively brief. I think that this debate is a useful opportunity to rehearse some key unfairnesses that apply to women and to women pensioners, which have arisen under successive Governments. The new clause is an excellent idea. It makes no specific commitment to particular changes, and the hon. Member for Burton (Mrs. Dean) and the hon. and learned Member for Redcar have spoken eloquently about practical solutions, some of which are less expensive and some more expensive, some of which are more accessible and some more difficult for Ministers to consider. However, the new clause does not commit the Government to anything except producing an annual report. We think that that is a useful discipline and we would support the new clause.
 I see that the new clause stands in the name of the hon. and learned Lady and those of four other members of the Committee. With support from Conservative Members, and, I hope, from the Liberal Democrats and others, we could carry it. It is inconceivable that the Minister will not accept this new clause, precisely because it commits the Government to so little on paper but provides a useful requirement in that this and other Governments will have to make an annual report. These historic unfairnesses will not be addressed overnight, or in the lifetime of one Government. From that point of view, this is a cross-party issue. 
 The hon. and learned Lady rightly spoke about not only the unfairnesses to older women, but the electoral significance that they hold: because they are older, those women are more likely to vote. Yesterday's Electoral Commission report made it clear that that group of voters is becoming more disillusioned with politics and politicians faster than any other. Having experienced a historically low turnout among 18 to 24-year-olds in the last election, we may find the willingness to participate in the democratic process among at least one group in society—older women—being eroded. As we know, older people are four times more likely to vote than younger people. Pensions may be one, but only one, of the factors involved, but it is important that we listen to what such people have to say. We support the new clause, however. 
 I pay tribute to the excellent work that Age Concern and the Fawcett Society have done. Like the hon. and learned Lady, I was present at the launch of the report ''One in Four'', which made the point that a quarter of single women pensioners live in poverty. That report was well received, although sadly the Government's reaction was muted, to put it mildly. Age Concern and the Fawcett Society have looked at a range of possibilities, such as reducing the lower earnings limit and having a weekly credit for carers that can be paid into the individual's pension. Personally, I have some sympathy for that idea, but we would want to consider it more closely as a party in the run-up to publishing our next election manifesto. Paying pensions to everyone in the national insurance system is another suggestion that will need some careful examination. 
 The good news is that a not insignificant proportion of women are helping themselves out of difficulties by getting a second pension. Again, the report from Age Concern makes it clear that although around 54 per cent. of men working full-time are members of an occupational pension scheme, 58 per cent. of women are in the same position. That prompts other questions. Many women work part-time, not full-time. The general question that has run through our consideration of the Bill is whether occupational pension schemes will, for various reasons—possibly including provisions in the Bill itself—go into long-term decline.

Vera Baird: I think that the figure from the paper the hon. Gentleman quotes is age related. Younger women are more likely to opt in to pensions than younger men, but as women get older and have children they are less likely to do so. The figures for membership among women older than 35 are substantially lower than those for men.

Nigel Waterson: I am grateful for the hon. and learned Lady's intervention and I do not disagree with her. What she mentions is another factor. The part-time and age issues are important, and I do not argue with any of that.
 I return to the report ''One in Four'' from Age Concern and the Fawcett Society. As it happens, one of the examples in the report is of a constituent of mine, Christine Dunn. She is an interesting example of how the problems arise and how the lucky ones can find a way out. She said: 
 ''I worked for the NHS for 23 years, with only a 14-month break to have my children. I fought for a long time to get involved in an occupational pension scheme but was not permitted for many years because I worked part-time.'' 
She described how frustrating she found the experience and continued: 
 ''I naively paid the 'married women's stamp' thinking this would secure me a decent retirement income but am now set to receive a state pension of 71p per week . . . despite currently paying £58.54 each month in National Insurance contributions.'' 
Christine Dunn's story is less depressing than others, as she said: 
 ''Fortunately I re-trained as a teacher at 40 . . . and have subsequently been able to build up an adequate second pension. With such a measly state pension to look forward to, this has been an absolute life-saver.''
That is merely one example of a phenomenon that one can see replicated across the country. Unlike Christine Dunn, however, many women have not even had the option of entering another profession and building up a second pension. 
 Finally, I touch on the basic state pension, which a much bigger issue that I am sure we will return to on Report. Age Concern made the point in its briefing that 
''pension policy must be built around a higher and more inclusive basic state pension. The Government must move away from means testing: it is costly, complex and too many pensioners miss out on their entitlement.'' 
I could not have put it better myself. I very much support the new clause.

Paul Holmes: I offer the wholehearted support of my fellow Liberal Democrats for new clause 29, which calls for the Secretary of State to prepare an annual report on the changes made to the pension position of women.
 The past few weeks have shown that hon. Members on both sides of the Room are agreed on the thrust of the Bill, although we have spent much time debating technical details and other aspects. However, there are two glaring omissions. We discussed the first about four weeks ago—the lack of compensation for the 60,000 or 70,000 people who will lose most of or all their occupational pension between 1997 and 2005. The second omission is the one that we are debating now, which affects a far larger group. 
 More than 60 per cent. of those of pensionable age get a bad deal from the pensions system. The problem is that the average income of women pensioners, who comprise 64 per cent. of retired people, is only 57 per cent. of that of male pensioners. Fewer than 12 per cent. of women receive a full basic state pension in their own right, while 25 per cent. of single women pensioners live in poverty, as was mentioned in the recent report by Age Concern and the Fawcett Society. Women account for 75 per cent. of pensioners on income support. That appalling problem affects as many as 2 million people—many more than the 60,000 or 70,000 who lost their occupational pensions, for whom we feel upset and about whom we have been campaigning. 
 Why is there such a major pensions scandal? Some answers are obvious. The key answer is to do with the woman's traditional role, which was to be a housewife. That is especially true for the oldest and the poorest pensioners—those over 80. Most of those are women. 
 I offer my mother as a perfect example of that group. She was a teenager at the start of the second world war and she worked in the cutlery industry in Sheffield. She married almost immediately after the war, giving up work completely in 1952, when her first child, my elder brother, was born. She did not return to part-time work as a home help until the end of the 1960s, when I started secondary school. That record of taking a long career break, of working only in low-paid jobs— [Interruption.]

James Cran: Order. There is far too much muttering developing in the Room. I wish to hear what Mr. Holmes has to say.

Paul Holmes: Thank you, Mr. Cran. That sort of career pattern is typical of that generation of women. Attitudes in society are changing, but only slowly. The hon. and learned Member for Redcar suggested that if change continued at that pace, it would be another two or three generations before women achieved parity.
 When I worked as a teacher, at least three colleagues took career breaks as children came along, and it was the man who was taking the break to look after the children. For one, it was a lifestyle choice. In the other two cases, the wives earned more than the men and it made economic sense for the husbands to take the break. Such change is coming through, but only slowly. 
 Even with those changes in the woman's role in society, and in our attitude to women working, it is still mostly women who take breaks from work—either for child care or, later on, to look after elderly and sick relatives. The majority still have lower-paid and often part-time jobs. They have average earnings of £19,811 a year, compared to £27,437 for the average male. That has a knock-on effect on their entitlement to a pension and on its value. 
 The Government might argue the point, but another aspect of the problem is that many women in the 1960s and 1970s unwittingly opted for the reduced rate of the married women's stamp, not realising the drastic effect that it would have on their pension entitlement. Of course, there are other factors behind women receiving such poor pensions. 
 What are the solutions? New clause 29 is not about solutions. It does not go into detail, but it calls for an annual report to highlight the Government's wonderful actions—or the embarrassing lack of action—to tackle that major pensions scandal. 
 As with compensation for those who have lost their occupational pensions—such as those at Chesterfield Cylinders, Demaglass and Coalite in and around my constituency of Chesterfield—the first step is to establish the principle that there is a problem and that it is the Government's responsibility to deal with it. Looking at the details of the solution comes afterwards. 
 The details have been very much mulled over already, and we have heard some examples from hon. Members during this short debate. For example, the Government solution is to reverse their promise made in opposition to end means-testing for pensioners and instead introduce ever more complicated and extensive means-testing—first the minimum income guarantee, and now pension credits, which have been praised by two hon. Members today. The problem with pension credits is that nearly half of those entitled to them are not getting the money—that is nearly 2 million pensioners. That is more than the one third of those entitled, whom the Government assume in their 
 budgetary figures will not claim the money. Those are the poorest pensioners, and the majority of them are women. 
 The Equal Opportunities Commission calls for various measures that would tackle some aspects of the problem. We have heard some of the details of those measures such as the reduction of the lower earnings limit of £77 per work and the annuity waivers for spouses. The TUC has also campaigned on various aspects that would improve the situation, and during the debate we have heard about abolishing the 25 per cent. rule and allowing greater back-dating on national insurance contributions. 
 The Liberal Democrats have campaigned for some years for a substantial increase in the basic state pension. Two speakers so far have referred to the need for a better basic state pension, or a citizen's pension as it was called. We have called in particular for an increase for the oldest, the poorest and, primarily, the female pensioners who are aged over 80—on average, men unfortunately tend to die considerably earlier than women at retirement age.

Nigel Waterson: I am grateful to the hon. Gentleman for giving way, and I agree with a lot of what he is saying. Can he clarify current Liberal Democrat policy? My understanding was that the previous policy had been withdrawn and was ''under review'' pending the party conference. It seems that at the moment the Liberal Democrats do not have a specific policy on the basic state pension. If I am wrong, the hon. Gentleman will no doubt tell me.

Paul Holmes: I thank the hon. Gentleman for his intervention. I specifically said that the Liberal Democrats have campaigned on this. How we would achieve it was fully costed in our last election manifesto. There is a detailed policy review going on—as is the case for almost the entirety of Conservative party policy—and we will present detailed and costed answers at our conference this autumn.
 We have also called for the Government to write to all women in their 40s and 50s—whoever paid the married woman's stamp in the past—to warn them in good time, so that they do not find out at the last minute, when they are at pensionable age, that their future pensions may be completely inadequate because of the way in which they were duped, short-changed or whatever it was that happened back in the 1960s and 1970s. We have also called for a Government inquiry into future pension provision for women. A Government inquiry that draws from all parties, from across the board and from all interested bodies will carry much more weight than a partisan political approach if it can reach agreement. In dealing with pensions policy, we are looking at 20, 30, 40 or 50 years down the line before things come into effect. We need commitment from political parties over a lengthy period, not just over the horizon of four years until the next election. 
 All those examples are, as I said at the start, different detailed proposals and suggestions. Some are better than others—the Liberal Democrat suggestions are among the better ones—but they are all open to 
 argument and debate. The most important first step is to achieve, first in this Room, all-party agreement on new clause 29. That commits the Government to producing an annual report that would highlight the progress, or the lack of it, of whichever Government are in power in tackling this major pensions scandal. It affects not 70,000 people, like the dreadful occupational pensions situation that we talked about four weeks ago, but up to 2 million people of pensionable age. In the spirit that the hon. Member for Eastbourne talked of a few minutes ago, I hope that we achieve all-party agreement, that the Minister will accept new clause 29 and that we will be able to have a yearly audit of what Governments are or are not achieving so that the public can hold the Government to account.

Adam Price: On behalf of Plaid Cymru, I wish to add our words of support for the new clause. It is fitting that, as we reach the twilight of the Committee, agreement is breaking out all around. I am sure that the Minister will not want to dissipate the warm glow that we all feel. The proposal is modest, practical and constructive. I am sure that he will want to reflect on that for a few minutes as I speak.
 We have heard the arguments set out clearly. For many years, there has been a huge gap between the retirement income positions of men and women. According to the Office for National Statistics, the gap has grown. Whether or not the labour market is in transitional mode in respect of gender disadvantage, the fact is that the gap is wider now than it was in the 1980s. The problem is deepening and, on current projections, will probably continue to do so for some considerable time. For that reason, it makes eminent sense to keep the critical issue of pensioner poverty among women under constant review, so that we can consider some less fundamental changes that we have discussed and the citizenship-based state retirement pension. The House of Lords Economic Affairs Committee supported that in its report at the beginning of the year. 
 The causes of pensioner poverty among women are quite complex and diverse. As we have heard, fewer women than men belong to occupational pension schemes and have personal pension schemes. Clearly, women have less time to build up pension rights but, interestingly, many women have also lost out on pensions through divorce. There have been changes in that area, although it is not clear whether they are having the hoped-for effect. 
 The compositional character of women's employment gives rise to an interesting debate on full-time versus part-time. The public sector tends to have better provision in respect of occupational pension schemes, and women in full-time employment tend to be skewed more towards the public sector. However, women in part-time employment tend to be in sectors that, by and large, have traditionally had less pension provision. In a report in 2000, the then Department of Social Security said that some types of job and certain sectors were significantly less likely to provide occupational pensions, namely those that were part-time, temporary, seasonal, located in small firms and 
 occupied by women. The predecessor Department highlighted that issue, and the Government accept that there is a particular problem in that area. 
 There has been widespread discrimination in the past in both the public and the private sectors in respect of pension provision for women. That legacy remains with us and will do so for some time. With regard to the private sector, I think that it was only in 1990 that the historic landmark decision was taken to ensure equal treatment for men and women in pension provision. 
 Women earn less than men, which is probably the critical problem, particularly for defined benefit schemes. It is clear what the consequence is because women's average pay is less than men's at the decision point before retirement. As we move to defined contribution schemes, that may be perceived as less of a problem, but there is also a problem with defined contribution schemes. As I understand it, because women live longer than men on average, they get a worse deal when defined contribution pension schemes are worked out. I think that there have been recent legal cases in that area, so it is a moot point whether actuaries, who were maligned during our earlier debates, will be permitted to discriminate based on greater life expectancy under the European convention on human rights. That is something to watch. 
 At the moment, the position is that a woman will retire with less income than a man who has made the same contribution, because of her greater life expectancy. Wherever we turn, whether it is looking to the future or to the appalling position in the past, we face a serious problem that, by and large, the Bill has not addressed. There have been some minor changes, which are welcome, that have addressed the issue of equality of pension provision for women. Unfortunately, however, on this occasion we have not won the debate on many of the suggestions that have been aired, and which were supported by the Equal Opportunities Commission, Age Concern and the TUC. None the less, the annual report will provide a platform on which we can return to this debate. I hope that the Minister will join the other voices that we have heard in support of the clause.

Malcolm Wicks: I am struck by the difference between the last amendment, which was proposed by the hon. Member for Eastbourne, and this one, proposed by my hon. and learned Friend the Member for Redcar. Whatever the merits or demerits of the hon. Gentleman's proposal, it was concerned with a small number of relatively rich individuals, who were mainly men. My hon. and learned Friend's proposals concern a large number of people, who are relatively poor and are women. Committee members may want to draw conclusions from the different proposals that have been advanced.
 I do not want to use this as an opportunity to outline the range of Government proposals that have impacted on women pensioners. I have a note telling me to do that, but many of the arguments would be familiar. Let me mention briefly that, as my hon. and learned Friend anticipated, pension credit is part of the story. Almost 2 million females—more than 1.9 
 million—are in pension credit households, whereas the number of men in such households is 961,000. That makes a Government point about the importance of pension credit and makes her point about the inequalities that have faced women, which make them rely on the pension credit proposals.

Nigel Waterson: Does the Minister have the estimated figures for the number of women contained in the nearly 2 million people who are not claiming pension credit and the 1.4 million who, his Department assumes, will never get round to claiming it, although entitled to do so? What proportion of those does he think are women?

Malcolm Wicks: I do not have those figures, but of course the difference between us is that I want those people to get pension credit, whereas the hon. Gentleman is trying to create a climate of confusion to prevent those people from claiming pension credit. In that dubious quest he is joined by the Liberal Democrats.
 The state second pension is also important. Almost 2.5 million carers are helped by it and they are mostly women, as are around 70 per cent. of the 5 million low-earners who benefit from the state second pension. That is another example of a proposal in place to help redress the debilitating inequalities that have historically faced women in this regard.

Sally Keeble: My hon. Friend is absolutely right that pension credit benefits such as those he mentioned have increased women's incomes. They have, however, made women reliant on the state, instead of on their husbands as was the case in the past. The points that my hon. and learned Friend the Member for Redcar made were about making sure that women had independent pension entitlement.

Malcolm Wicks: I was agreeing that the pension credit data support both the Government argument and that of my hon. and learned Friend the Member for Redcar. Whether one wants to be dependent on one's husband or on the state must depend on the characteristics of both at any particular point in time.
 Stakeholder pensions are also relevant. Forty per cent. of stakeholder pensions sold so far have been bought by women. That is another indication. As I said, I do not want to go through the Government's record on that, but I thought it important to make those points in answer to colleagues' questions. 
 Let me address the issue differently. I fully recognise that our society, economy and welfare state are based on views about gender. The welfare state—even the parts added since the 1940s—is based on certain assumptions, which were conventional at the time, about the roles of men and women. For example, the Beveridge report shows that Beveridge had clear views about married women's dependence on their husbands. I fully understand that issues of income in 
 working life and in retirement reflect what I have described as the debilitating consequences of gender inequalities, which are still with us today despite the many advances that have been made. 
 I remember reading a book some years ago by a New Zealand academic and one-time politician—for the National party, I believe—called Marilyn Waring. The book, ''Counting for Nothing,'' is an analysis of how much of women's economic activity, such as child care, voluntary activity and care for elderly relatives, is invisible to Government statisticians and is not in public accounts because it is outside the formal economy. It is interesting that Governments in this country, and in others no doubt, have started to recognise that kind of activity, which is not in the formal labour market. The way in which responsibilities such as caring for young children have been recognised by different Governments in social security policies, home responsibility payments and, more recently, in the state second pension, recognises the difficulties faced by women who are carers—of course, not all carers are women, but the majority are—and says that that sort of caring activity, which is a growing feature of our kind of society, should be recognised in state pension arrangements. It is a moving picture, but I can tell from the arguments advanced by my hon. and learned Friend the Member for Redcar that it is moving at a slower pace than she would like. 
 At this stage, I am not convinced that we need an annual report. However, the forceful speech of my hon. and learned Friend and the supporting speech of my hon. Friend the Member for Burton (Mrs. Dean) have convinced me that a report would be helpful. Therefore, I undertake that my Department will publish a report on women and pensions, probably in the next calendar year. We will then assess its impact, and the contribution that it makes to the debate—or its worth—to see whether it should be followed by a periodic report, but not an annual report. 
 I congratulate my hon. and learned Friend for putting her argument so forcefully, as she made me reconsider the usefulness of a report. I have given a clear pledge, so I hope that she will consider removing her new clause in light of that commitment.

Vera Baird: I thank everybody for their support for this modest proposal, as it has been called. I am also thankful for the consideration that both sides of the Committee have genuinely given to my arguments. I hope that Opposition Members are serious in their support for the proposal, and that they are not crying crocodile tears for some political advantage in the Committee. If so, I expect their manifestos to contain serious proposals to increase the quality of women's pension provision soon. Although none of them has a prospect of forming a Government, it helps to keep the issue on the agenda if it is addressed in other parties' manifestos. I am sure that there will be such measures in our own.
 I am grateful to the Minister for his positive response and his obvious appreciation of the moving picture, as he put it, of the role of women and the need to acknowledge those changes and to ensure that the 
 role of women is appreciated both as they emerge into the labour market and as they retain their residual primary caring role. He also properly acknowledged, as was only to be expected, that it is important to give financial credit to both roles that women inevitably play and to ensure that both roles help women to contribute to a richer retirement than they are able to have currently. 
 I am very pleased that my hon. Friend has been moved, as he professes himself to have been by the calibre of the arguments, to announce a report next calendar year. I think that the Bill is intended to come into force next calendar year, so the next calendar year would have seen the first annual report that could have resulted from the Bill. 
 Sitting suspended for a Division in the House. 
 On resuming—

Vera Baird: With one more round of thanks for everyone's help and support on the issue, my hon. Friend the Minister talked about being able to publish such a report probably in the next calendar year; did he mean definitely by the end of 2005?

Malcolm Wicks: Yes.

Vera Baird: I am grateful to my hon. Friend. That is the first year in which there would have been an annual report anyway, because the Bill will not come into force until 2005. When one reflects on the matter, it appears that annual reports may not be the perfect model, because pension provision takes a while to filter through. Perhaps one report per Parliament would have been more satisfactory and as my hon. Friend has handsomely offered, we would be able to discuss the impact of the first annual report, perhaps with a view to ensuring that there is one per Parliament, which might be more satisfactory. Obviously, it will be debated, at the very least in Westminster Hall, if we put it on the agenda. It is an important concession for which I am hugely grateful. I hesitate for only a moment.

Gregory Barker: Given that we know that the Government are capable of reversing clear manifesto commitments, let alone promises offered in Committee, I urge the hon. and learned Lady to stick to her guns, rather than falling over so easily.

Vera Baird: This shows up my worst fears. I asked whether hon. Members were crying crocodile tears; I am now satisfied that they were, and they are playing silly games. Of course I will not doubt my hon. Friend when he tells me that there will be a report and that we will seriously discuss the possibility of having one per Parliament. I beg to ask leave to withdraw the motion.

Hon. Members: No.

Vera Baird: On a point of information, Mr. Cran. Are we to vote on whether the motion may be withdrawn, or on the substance?

James Cran: The Division is on the second reading of the new clause. So that everyone is clear, I have to put the question that the clause be read a second time.
 Question put, That the clause be read a Second time:—
The Committee divided: Ayes 7, Noes 14.

Question accordingly negatived.

George Osborne: On a point of order, Mr. Cran. Is there any way of putting on the record—into Hansard—that the hon. and learned Member for Redcar, and the hon. Members for Burton, for Northampton, North (Ms Keeble), for Coventry, South (Mr. Cunningham), and for North Durham (Mr. Jones) all voted against an amendment to which they had put their names?

James Cran: Of course—the hon. Gentleman has already done so.

John Robertson: Further to that point of order, Mr. Cran. Is there any way of getting into Hansard the fact that that point of order was spurious and had nothing to do with the debate?

James Cran: The hon. Gentleman has also achieved his aim. I shall take no more points of order.New Schedule 1 Reviewable matters

New Schedule 1 - Reviewable matters

1 Whether an occupational pension scheme is an eligible scheme.
 2 The issue of, or failure to issue, a notice under section 97(2) (Board's duty where insolvency practitioner fails to give a notice under section 96).
 3 The issue of, or failure to issue—
(a) a notice under subsection (2) of section 102 (scheme rescue not possible), or
(b) a withdrawal notice under subsection (3) of that section (scheme rescue has occurred).
 4 Any direction given under subsection (2) of section 106 (directions during an assessment period) or any variation or revocation of such a direction under subsection (4) of that section.
 5 The issue of a notice under section 108(2) (power to validate contraventions of section 107).
 6 The making of a loan under section 111(2) (loans to pay scheme benefits), the amount of any such loan or the failure to make such a loan.
 7 The approval of, or failure to approve, a valuation in respect of an eligible scheme under section 113(2).
 8 The issue of, or failure to issue, a withdrawal notice under or by virtue of—
(a) section 115 (schemes which become eligible schemes), or
(b) section 116 (new schemes created to replace existing schemes).
 9 The issue of, or failure to issue, a withdrawal notice under section 117(5)(a) (no insolvency event has occurred or is likely to occur).
 10 The issue of, or failure to issue, a determination notice under section [schemes required to wind up but unable to buy out liabilities](6) (authorisation to continue as closed scheme).
 11 Any direction given under section 119(7) (directions about winding up of scheme with sufficient assets to meet protected liabilities) and any variation or revocation of such a direction.
 12 The issue of, or failure to issue, a determination notice under section 121(2A) (whether value of scheme assets less than aggregate of protected liabilities etc).
 13 The failure by the Board to give a transfer notice under section 122.
 14 Any determination by the Board of a person's entitlement to compensation under the pension compensation provisions or the failure in any case to make such a determination.
 15 Any failure by the Board to make a payment required by section 125(3)(b) (adjustments to be made where Board assumes responsibility for a scheme).
 16 The amount of the initial levy or any pension protection levy payable in respect of an eligible scheme determined by the Board under section 143(3)(b).
 17 The making of a fraud compensation payment under section 144(1), the amount of any such payment or the failure to make such a payment.
 18 The issue of, or failure to issue, a notice under section 145(2) (scheme rescue not possible or having occurred in case of scheme which is not eligible or not subject to insolvency events).
 19 Any settlement date determined by the Board under section 146(2) (recovery of value) or the failure to determine a settlement date under that provision.
 20 Any determination by the Board under section 146(4) (recovery of value: whether amount received in respect of particular act or omission) or the failure to make such a determination.
 21 The making of a payment under section 148(1) (interim payments), the amount of any such payment or the failure to make such a payment.
 22 Any term or condition imposed by the Board—
(a) under section 147(2) on the making of a fraud compensation payment; or
(b) under subsection (4) of section 148 (interim payments) on the making of a payment under subsection (1) of that section.
 23 Any determination by the Board under section 148(3)(b) (interim payments) that the amount of a payment was excessive.
 24 Any date determined by the Board under section 149(4) (earliest date for making a fraud compensation transfer payment).
 25 Any determination by the Board under section 149(6) (fraud compensation transfer payments: whether payment is received in respect of particular act or omission).'.—[Malcolm Wicks.]
 Brought up, read the First and Second time, and added to the Bill. 
 Question proposed, That the Chairman do report the Bill, as amended, to the House.

Malcolm Wicks: I shall make the customary, but sincere, closing remarks, in the form of a vote of thanks. Unfortunately, I cannot give a vote of thanks to the Liberal Democrat and Conservative women
 MPs on the Committee, who could not take part in this outbreak of artificial feminism because there were none.
 We have now almost reached the end of our discussions in the Committee, and I will reflect briefly on the past eight weeks. Last Tuesday, I congratulated the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Gravesham (Mr. Pond), on his appearance in the marathon. I believe that he said that he had been unable to prepare in the normal way but that his experience in the Committee had prepared him in other ways. As I recall, he indicated that it was a painful event, which took a long time, and in which one ended up at the place at which one had begun. He did not mention that he had at least managed to finish; so, finally, has the Committee. 
 However, we have not ended up at the place at which we began. We have achieved considerable progress during the 22 sittings of the Committee. I know that Opposition Members will be disappointed, although not unduly surprised, that we have not accepted any of their amendments. However, we have taken some of those amendments away for consideration and brought them back, or will do so at a later stage in the consideration of the Bill. Last week, I commented on the forbearance of Opposition Members in the matter of Government amendments. 
 This has been a long, complex and technical Bill, although I know that many hon. Members will miss it in the weeks to come. We have had to introduce more amendments than we would normally have liked to do, but even in the halcyon days of the Pensions Act 1995 there were large numbers of Government amendments. Perhaps that is a feature of pensions Bills, and why they seem to occur only once a decade. 
 On several occasions during the Committee's discussions we mentioned the parliamentary draftsmen, although, for this Bill, they have mostly been parliamentary draftswomen. They are mainly unseen and often maligned. However, without their perseverance and fortitude the Bill would not be here; I should like to pay tribute to their contribution in the Official Report. 
 Changes in this area are not undertaken lightly. The Government are keen to ensure that the PPF is put in place as soon as possible, so that pensions can be protected from April 2005, and that has meant amendments along the way. Of course, we have not forgotten the lengthy debate initiated by my hon. Friend the Member for Cardiff, West (Kevin Brennan). I take this opportunity to commend him on his tireless pursuit of a remedy for those who have already lost their pensions. 
 Although we have no announcement at present, as I said last week we are continuing to search for information. As I said in the House yesterday, Members will have to be a little more patient. 
 I want to thank you, Mr. Cran, and Mr. Griffiths for the way in which you have chaired the Committee. On more than one occasion we moved at such breakneck speed thanks to your rigour that I was very confused.

James Cran: The Clerk was not; that is the point.

Malcolm Wicks: If, Mr Cran, you had been running the marathon at that speed, you would not only have beaten the Under-Secretary, but possibly got ahead of the rhinoceros and the chickens. Sadly, my colleague never got in front of them. I hope, Mr. Cran, that we did not give you too many occasions for intervention and that you have enjoyed the experience of the past eight weeks—as we all have.
 I also take the opportunity to thank members of the Committee for the full part that they have played in the proceedings. The hon. Member for Eastbourne and the hon. Member for Tatton (Mr. Osborne) have probed the Bill with the help of many outside groups and, of course, the Library. 
 I should also like to thank the hon. Member for Northavon, who is sometimes typecast by others, but not by myself, as a boffin. However, given that he served as a research assistant to the hon. Member for Eastbourne on one occasion, he is a very useful boffin. He can always be relied upon to do his research and ask the most difficult, but telling, questions. Although I sometimes cross swords with him, and even give way to mild irritation, anyone who taught my daughter the subject of social policy at Bath university so ably is someone that I can never entirely get irritated by. 
 I must thank my hon. Friends for their participation and support of course. They have made a considerable contribution and it was particularly pleasant to end our deliberations on a new clause that was tabled from the Labour Benches; even if—I am thinking on my feet—we could not accept the annual nature of the report we were certainly keen to accept its principle.

Sally Keeble: It is probably more important to have an annual report and then some action than to have repeated reports with no action afterwards. I hope that my hon. Friend's one report will report action.

Malcolm Wicks: I thank my hon. Friend very much.
 I particularly want to thank my hon. Friend the Member for Greenock and Inverclyde (David Cairns), who cannot be present today, for his invaluable assistance during the proceedings, and also my hon. Friend the Member for Luton, South (Margaret Moran) for working through the usual channels. I also want to thank my hon. Friend the Under-Secretary for his support during the Bill. He was able to assist on pensions while also carrying out the rest of his normal duties, including earlier this afternoon giving evidence on identity cards to a Select Committee. I am sure that he saw that as more of a 100 m event. That is why he missed our proceedings this afternoon. It has been a pleasure to have him on board and to give him his first major experience as a Minister on a Bill of this kind. 
 Of course, Mr. Cran, you have been ably assisted by the Clerk, and we have all greatly benefited from his advice. He serves Committees with great diligence and I know that he is effective as a servant of the House in at least five countries where I have been present with him when I was on a previous Select Committee. All of us must thank the Hansard writers, who, as ever, have 
 recorded faithfully every word that has been uttered—and some that we did not mean to utter—and the House officials, who also deliver our messages. 
 I must also pay tribute to the policemen who sit at the door. They have not had a great deal to do during the Committee, with so few votes to call, but when necessary they have carried out their job with their usual dedication. How they have managed that without identity cards I do not know, but it might be that certain Conservative Members who were not present during the Committee were prevented from coming in. 
 I am sure that the Bill is leaving Committee in a better state than it began. During one of our discussions we had an outbreak of song, not in a literal sense, but in the form of references to both Don McLean and Simon and Garfunkel. I am advised that it might be more appropriate to end with some home-grown talent. We have come through the magical mystery tour and made it to the end of a long and winding road. I am pleased to acknowledge that I have received a little help from my friends. When I am 64—still some years away, I am pleased to say, despite the Department's commitment to extended working—I hope that I shall not be working, as I have during the Committee stage, for eight days a week.

Nigel Waterson: I associate myself unreservedly with the various thank yous with which the Minister has dealt so ably: to yourself, Mr. Cran, and Mr. Griffiths, the Clerks, the Hansard writers, the officials, outside bodies and individuals, the police and all the other staff of the House. I particularly thank the officials and the draftswomen, who have done so much to keep us interested in the Bill. It has been a bit of a rollercoaster: one has never known from one week to another what shape the Bill was going to be in, so it has been extremely helpful to have all the last-minute changes. We look forward to the last-minute changes on Report and in their lordships' House.
 I should like to thank my colleagues, particularly my hon. Friend the Member for Tatton, for helping me to probe the Bill and reveal its many unsatisfactory aspects. It is always a pleasure to be on this side of the Committee with the hon. Member for Northavon. I do not think that his relationship with the determinations panel will ever be fully in the public domain, but that is something that clearly gets him extremely excited. We are leaving behind a number of old friends, including the determinations panel, the reconsideration committee—another strange product of this legislation—and our old friend, the deputy PPF ombudsman. That is a role to which some of us hope to aspire in our semi-retirement one day, but it will apparently be denied to parliamentarians. We wish whoever he or she is well in the ranks of the ombudspeople. 
 I should like to thank the Ministers for being, on the whole, good-natured, if sometimes a little vague about their legislation. I should particularly like to thank a number of Government Back Benchers, who have made an enthusiastic and knowledgeable contribution to many of our debates. Their enthusiasm has not extended to voting for their own amendments and new 
 clauses but, having been a Whip myself, we all understand such matters. The Minister, in particular, has been a great inspiration to us all. I notice from his biographical details that in 1997 he was urging credits for those who sacrifice pensions to care for relatives, so that is another example of something in which he believed before he became a Minister. He also lists as one of his activities 
''very occasional white water rafting''. 
I think that this Bill has been the nearest dry land equivalent to that. He is described in one of the reference books as ''Frank Field without God'', which says it all. The Daily Telegraph sketch today says, quoting him in the House yesterday: 
 '' 'It is very important not to do anything that might raise expectations', said Mr. Wicks, speaking through a suntan.'' 
I do not know where he achieved that. 
 We enjoyed hearing about the Under-Secretary's marathon run, not forgetting that at one time, The Independent dubbed his loyalty to the Government ''stomach churning''. We have also been very privileged to have a future Home Secretary join us briefly—the hon. and learned Member for Redcar, who has always been very insistent and well researched on the subject of women's pensions, among other things. The hon. Member for Cardiff, West has been like the ghost at the feast. Having joined the Young Communist League, he obviously saw the error of his ways, and has been fighting a doughty battle for some of his constituents. The chapter remains to be written as to what happens to his constituents, and those of other hon. Members. It has been like the elephant in the Committee Room that, despite everything else that we have debated, the fate of the 60,000 people remains out there somewhere. There seems to be a suggestion of some movement on the issue by Ministers, and let us hope that that is right, with the encouragement of the Prime Minister of course. I pay particular tribute to the Minister's Parliamentary Private Secretary, the hon. Member for Greenock and Inverclyde, who has made the transition from being a Roman Catholic priest to the traditional role of a PPS, which is to shout abuse at the Opposition spokesman from a sedentary position. I am sure that his training for the priesthood came in handy. 
 Malcolm Wicks: He was not on his knees. 
 Mr. Waterson: Difficult to tell, but I do not think that he was. 
 Mr. Cran, this has been a relatively good-natured Committee stage, given the complexity of the Bill and the extraneous factors that have been at work. There is still much work to be done. We will return on Report to old friends such as the determinations panel, but for the moment it falls to me on behalf of my colleagues to thank you and your colleague, Mr. Griffiths, for your courteous and effective chairmanship. The Committee has worked extremely hard and I hope that all its members, particularly those on the Government Benches, and especially those who did not vote for their own amendments, will get their reward in due course.

Steve Webb: Imagine, Mr. Cran—you might have thought that we would never reach this point, but we have. I echo the thanks of the Committee to you and Mr. Griffiths for your humane chairmanship—in particular, given the unseasonal weather, your attitude to jackets off, which has been very welcome. I thank my hon. Friend the Member for Chesterfield (Paul Holmes) and the hon. Member for East Carmarthen and Dinefwr (Adam Price) for their contributions. It has, indeed, been a good-natured Committee. It takes a certain sort of pensions anorak to say that he has enjoyed the proceedings, but I admit that I had my moments when we really got going. I am grateful for the Minister's response to a number of the amendments that we tabled, and for his assurances that he would reflect on issues such as the married woman's stamp—I do not know how much time he has to do it or how quickly he can reflect, but sooner rather than later would be greatly appreciated.
 It has been good to hear the contributions of the hon. Member for Eastbourne. Often, I have looked at a complex briefing from an outside body and thought, ''I do not need to read this.'' That has been a great blessing. While we look forward to the moment when we understand better what the Conservatives think about the Bill, we are pleased that it has progressed through Committee. We want to see it on the statute book because we want to see pensions better protected, and it has been a pleasure to serve with all members of the Committee. We, too, thank those who have already been mentioned.

James Cran: On behalf of my co-Chairman, I thank those who have spoken for their kind remarks, some of which were more fulsome than others—I have noted that. The background to that comment is that the hon. Member for Eastbourne and I served in the Opposition Whips Office for some time, and know a great deal about each other. That is the best that I can say. I also, on behalf of Mr. Griffiths, thank all Front Benchers for the extraordinarily high quality of debate. This has been a very easy Committee to order. In fact, order is not the correct word; just a slight tilt at the tiller has brought the Committee back to the direction in which I have thought that it should be going.
 Mr. Griffiths and I would also, of course, like to associate ourselves with all the thanks that have been expressed to the Hansard writers, without whom people would not in future be able to read the wise words to which I have had the pleasure of listening; to the doorkeepers; to the policemen; and of all—this is the one with which I want to finish—our Clerk and those who have occasionally stood in for him. If this Bill had been left, dare I say it, Minister, to you and me, it would have got into the House 75 per cent. as you would have wanted it to be. The Clerks ensure that it is 100 per cent. as it should be and, for that, very many thanks are due. 
 Question put and agreed to. 
 Bill, as amended, to be reported. 
Committee rose at fourteen minutes past Five o'clock.